Microsoft’s long awaited push into cloud computing continues today, as the company announces plans to offer fully functional, if “lightweight,” versions of its popular Office applications as web services that will run in people’s browsers. The move signals Microsoft’s intention to defend its massive Office business against incursions from Google Apps, Zoho, and other online competitors. Versions of the apps will be available in both ad-supported and subscription models, according to Microsoft’s Chris Capossela:
We will deliver Office Web applications to consumers through Office Live, which is a consumer service with both ad-funded and subscription offerings. For business customers, we will offer Office Web applications as a hosted subscription service and through existing volume licensing agreements. We will show a private technology preview of the Office Web applications later this year.
Meanwhile, Google isn’t standing still. Yesterday, it announced that it would allow its Gmail users to embed features of its Google Docs word-processing application and its Google Calendars application into their email windows. This will aid the company in promoting its suite of Office substitutes to its large group of Gmail users.
The battle is joined. The outcome will be determined not only by whether Microsoft will be able to maintain its dominance of the Office market but also by whether it can maintain the outsized revenues and profits it has long enjoyed in that market.