One long-awaited development is Office Web Apps, Microsoft's competition for Google Docs and other online office suites. While the current beta only makes Excel and PowerPoint available to consumers via Windows Live, Word and OneNote are available to businesses via SharePoint Server. By the time Office 2010 launches in mid-2010, all apps will be available online to both sectors.

But based on the current versions, a PC World reviewer said, Office Web Apps are "no match" for Google and Zoho. "For example, Excel can't create charts, Word has no support for revision mode, and the slide-creation tools in PowerPoint pale next to the wealth of choices in Zoho Show," Yardena Arar wrote.

The problem with web apps has always been how can Microsoft compete with Google's free offerings without cannibalizing sales of its flagship desktop products? "The availability of Office compatibility with the web actually supports the web-apps approach that Google is taking," Greg Sterling, principal analyst with Sterling Market Research, said in an e-mail. But the company really has no choice. "Microsoft needs to do this; it's the direction the market is going in," Sterling added.

Taking Office Mobile

The approach continues to be to make the online software an adjunct to the real desktop. "The offerings' lack of features suggests that Microsoft isn't trying to create a web-based productivity ecosystem so much as it is attempting to give customers a Microsoft option for basic editing when they don't have access to the desktop software," Arar said.

The beta also includes a version of Office for Windows Mobile devices, which lets users edit Word, Excel and PowerPoint files on smartphones. Businesses may be especially interested in SharePoint Workspace Mobile 2010, which lets smartphone users access documents and save them directly to a SharePoint server . The software also performs live syncing. When documents are changed on the server, the version on users' mobile devices automatically updates. (continued...)

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