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Not content with battling Google (Nasdaq: GOOG) on the search front, Microsoft (Nasdaq: MSFT) now plans to offer a free, lightweight Web version of its Office productivity suite.
The Web app will come as part of the next major release, Microsoft said Monday, as it announced that Office 2010 was entering an invite-only technical preview, with general availability projected for the first half of next year.
The online offering will include versions of Word, PowerPoint, Excel and OneNote. Users will apparently be able to access the free versions regardless of whether they buy a copy of Office 2010.
The package is similar to free offerings from Google and Zoho, both of which offer word processing, presentation and spreadsheet applications.
Enterprise Advantage
What is different in Microsoft's approach is that it will allow users to host the documents on their own networks -- something Google and Zoho don't currently allow, Forrester analyst Sheri McLeish told TechNewsWorld.
That capability could help push enterprise customers who've been reluctant to embrace cloud computing but need to update their aging productivity suites.
"That very well could be a differentiator for Microsoft here," said McLeish.
What Microsoft is really trying to do, according to Rob Enderle, principal analyst with the Enderle Group, is make sure it holds onto existing customers before Google figures out a way to market its free productivity suite in a way that really makes it take off with consumers.
"Microsoft knows they've got to get as many people on Office 2010 as they can before Google gets with it," he told TechNewsWorld. "Not having [online access] would clearly put them at a competitive disadvantage."
Adoption Still Low
Just 3 percent of U.S. and Canadian consumers regularly use online productivity applications, reported Forrester in March. On the other hand, nearly 75 percent of online adults own paid licenses for Office applications.
However, Microsoft can't take its competitive dominance for granted, Forrester said, calling the online space "ripe for growth" among young, educated and tech-savvy consumers.
Thirty-six percent of consumers in Forrester's survey said they had tried online software that they considered to be at least as good as purchased software.
"The value of the cloud, combined with disillusionment over paid software, creates latent demand among consumers that Web-based challengers can tap," Forrester concluded.
Microsoft has been on a marketing 
roll lately, with well-received campaigns countering Apple's (Nasdaq: AAPL) "I'm a Mac" ads, as well a series of quirky spots characterizing modern search engines -- presumably including market leader Google -- as scatterbrained.
Microsoft would do well to extend that trend to its upcoming Office release, Enderle said, and it appears the company may be doing just that.
Microsoft has produced a movie-trailer style promo for the upcoming suite that's light on details about Office, but heavy on style and cheeky references to the suite's retired "Clippy" search assistant.
Details Scanty
When the full details are out, the newest update of Office won't be the watershed the 2007 update represented, with its significant user interface changes to Microsoft Word, according to McLeish.
It will, however, extend that interface to the other programs in the suite.
Microsoft media relations officials weren't able to respond to inquiries about the company's plans for Office 2010 by deadline for this article.
The suite will include improved collaboration features for Word, PowerPoint and OneNote, as well as the ability to ignore unwanted email threads in Outlook, according to press materials.
Excel gets new features to help visualize data trends.
The suite also will support basic image editing.
Microsoft plans to offer fewer versions of the product -- five instead of eight.
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