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Microsoft prepares for Office 365 launch

Microsoft chief Steve Ballmer is due to hold an event in New York today to launch Office 365, the company's answer to the lost revenue caused by businesses moving to web-based productivity suites like Google Apps and Zoho.

The department responsible for Office is Microsoft's single biggest money maker, and it's not hard to see why: the company's productivity suite has become the de facto standard for businesses around the world, to the point where its file types - Word documents, Excel files, and PowerPoint presentations - are frequently used in place of more generic nomenclature.

There's been something of a revolution over the past few years which has the company worried, however: a move to free or low-cost web-based productivity suites. While sometimes lacking in power and flexibility, such tools have numerous advantages over their desktop-bound brethren: they're responsive even on older hardware, they store files on-line so they can be accessed anywhere, they enable collaboration, and - perhaps most importantly - they're cheap.

Compared to the cost of Microsoft Office 2010 licence, the monthly cost associated with a business-friendly Google Apps or Zoho account is minimal. That's causing no small amount of lost revenue for Microsoft, so it's joining the fray directly with Office 365.

Building on Office Web Apps, a cut-down Google Docs-style offering from last year, Office 365 has been running in beta for a while and offers some major advantages over the competition. Chief among these is the promise that, following its full launch, it will become the on-line equivalent of Office 2010, offering the same functionality and features as its desktop equivalent.

Microsoft is also heavily pushing the potential for collaboration with Office 365, offering integration with the company's unified communications software Lync. Sadly, use of Lync requires installation of a Windows package, meaning Linux users hoping to join in the fun will be left out in the cold.

In our testing of the pre-release trial, Office 365 seemed quick and responsive. Perhaps surprisingly for a Microsoft product, we encountered no real issues with using Firefox as the web browser to access the site. We did, however, lose the contents of one document when switching between normal and reading views in Word, thanks to a failure of the autosave mechanism.

We also struggled with the company's much-vaunted mobile support, which failed to operate correctly on our Android-based test handset. That's a shame, because the ability to edit documents on the go from a tablet or smartphone would be a major selling point for many businesses.

As impressive as Office 365 is, there's a major fly in the ointment. Unlike Zoho and Google Apps, there's no free option for light users. Pricing starts at £4 per month per user. The full details of the new pricing structure, which is believed to be tiered with a higher fee being charged for full Office 2010 access, are due to be released at Microsoft's press conference later today.

There was much we enjoyed during our limited time testing Office 365, but little that could convince us to stick our hands in our pockets and move from our favoured Google Apps platform. Google - for obvious reasons - agrees, and product manager Shan Sinha has posted an argument against Microsoft's offering (opens in new tab) and for Google's which might make for uncomfortable reading at Microsoft's HQ.

A free month-long trial of Office 365 is available from the official website (opens in new tab). monitors all leading technology stories and rounds them up to help you save time hunting them down.