MS revamps Office to take on Google Apps

Microsoft will launch Office 2010 and SharePoint 2010 to businesses this week, followed later by a consumer launch of Office in a few weeks time.

Office has been the dominant force in productivity software, ever since the likes of Lotus and Borland were sent packing. But now Microsoft faces a greater foe in the shape of Google, with its free online Docs offerings, as well as from the equally free Open Office.

It's thanks to Google, though, that Microsoft has been forced to produce a free, cloud-based, ad-supported version called Office Web Apps.

Google says it has no plans to put ads on its Docs, but it goes against the grain for Microsoft of give something away for nothing. Especially when the Office Business Division raked in $19 billion in sales in fiscal 2009 and generated some $12 billion of the the company's overall operating profit of $20 billion.

Microsoft has already launched Docs for Facebook, adding a cloud-based version of Office into the social network. It also recently acquired www.docs.com.

Office Web Apps will allow users to create and share Office docs with people who don't have Office as well as those that do. Google Docs, of course, does a similar thing.

But the could-based system will be shy of much of the functionality of the full-blown Office suite. It is also inherently less secure and - self-evidently - reliant on a decent web connection.

Microsoft has built large data centres in Chicago, Texas, Ireland and elsewhere to support its cloud-based offerings. And the firm its plugging its cloud-computing platform, Azure, to software developers, encouraging them to build cloud-based apps on the Microsoft-hosted platform.

But Microsoft needs to ensure that consumers and particularly businesses keep buying Office software in the traditional way in order not to slay its own cash cow.

The firm has built new features into the product which we'll be looking at later this week. Later still we'll put the product up against its own cloudy offerings and see how they stack up against Google's.

Business customers will be able buy Office 2010 from Wednesday while consumers and small businesses will have to wait until June for theirs. The free Office Web Apps also will become available to consumers in June.

Office 2010 is priced at from $119 to $499, depending on the version. The UK pricing is here.