Microsoft Office 2010 Takes Aim at Google Docs

Microsoft is preparing to launch its latest weapon in its ongoing battle with Google. The software giant will launch its flagship product Office 2010 to businesses on 12 May.The latest version of the software has a free online component - called Office Web Apps.

Analysts believe the web offering is a response to Google, which has been encroaching on Microsoft's core business with its free online tools. Crucially, Microsoft will also offer its online office suite to all users of one of the world's most popular social networking sites, Facebook, reports BBC News.

"There's no question - Microsoft is responding to Google's threat," said Whit Andrews, analyst at research firm Gartner.

Google and Microsoft have increasingly begun to stray into each other's traditional markets. Microsoft has thrown its full weight behind its search engine Bing, whilst Google is about to launch its own operating system, known as Chrome OS.

The battle for the Office software market started in 2006 when the search giant launched the first elements of its Google Docs.
"Until Google emerged with a credible suite of networked applications, Microsoft was not compelled to do anything," said Andrwes.

Google Docs now offers word-processing, spreadsheet software and a presentation tool, amongst others. Businesses can pay for premium versions. It currently has a small (4%) but growing share of the market.

By contrast, Microsoft dominates the Office software space, with a market share of more than 94%, according to Gartner. The vast majority of sales are to businesses. Business "is still overwhelmingly a Microsoft world", said Sheri McLeish, analyst at Forrester Research.

Microsoft retains its dominant position despite the free offerings from Google and other alternatives such as Zoho or the free office suite OpenOffice.org. However, Andrews warned that these offerings - and particularly those that were web based - were likely to appeal to younger people, who have not necessarily grown up using Microsoft products.

"If all your content is generated in the Google apps system and it lives there, you would need to have a really good reason to move," said he.