Infinite Path

Microsoft has announced its plans to launch a free web-based version of its popular Office software in a move thought to be, at least in part, a reaction to Google’s recent attempt to chip away at Microsoft’s dominance.

Lightweight versions of Word, Excel, OneNote, and PowerPoint will feature in Office 2010 and it is thought that Microsoft’s latest offering will at last provide a serious rival to Google’s Docs suite.

Users of Microsoft’s Windows Live will be able to experience these web-based versions free of charge. Approximately 400 million people are currently subscribed to Windows Live.

Matt Rosoff, an analyst at Directions on Microsoft, believes that Microsoft’s development of an online document suite is a direct “response to Google. This is a move that they probably wouldn’t have made if they didn’t have to, but there is enough competition bubbling up that they thought they needed a response”.

The official word from Microsoft is that they are simply keen to offer their “half a billion customers worldwide” the opportunity to experience “collaboration without compromise” but the financial implications of this latest move have been questioned.

It is thought that offering free online software is a financial risk, at least in the short-term (Microsoft’s Business Division generated $12 billion in profit last year), but it is a risk which is counteracted by the need for Microsoft to retain brand loyalty in the long-term. Katherine Egbert, an analyst at Jeffries & Co stated: “Microsoft is finally making the conversion through the web-based world. First, we saw that through Bing. Now we are seeing that through Office”.

Microsoft may also place advertising on their range of online applications once it becomes available in mid-2010.