Microsoft links Office to network ‘cloud’

Beset on all sides by online competitors to its still massively profitable Office suite, Microsoft today opened up a beta test of a new service that lets users of its desktop apps save and collaborate on documents online.

Microsoft competitors like Google, Zoho, WebEx and others typically take an online-first approach, enabling users to work with online versions of common tools like word processors, spreadsheets and presentation programs. More recently, offline access has been added to those apps, most notably using Google’s “Gears” product.

Few if any of these “Web office” competitors have integrated voice communications into their online offerings yet – though voice-over-IP integration is clearly on the road map for some.

Microsoft, with a billion-dollar revenue stream to protect in Office, comes at the problem in a different way. Its new Office Live Workspaces (beta signup here) acts as an online extension to its desktop applications. Users work on documents using their regular Office applications and then can save those docs to an online workspace. Once online, users can access and update the documents themselves as well as invite others to work with them collaboratively.

“If I’m creating or editing a document in Word, I want to be able to save it to the Web as if I’m saving to my own hard drive – no hunting around for URLs or saving and then uploading,” said Kirk Gregersen, Microsoft Office director of consumer and small business product management, in a statement. “We’ve seen that if people are working on a document and have to go to the browser to upload, many just can’t get over that hump.”

Microsoft has dubbed this hybrid approach “software plus services” as a way to distinguish itself from pure online players. While Google’s apps are still primarily used by individuals, Google has been pushing hard to win enterprise customers with special packaging, pricing and a systems integration deal with Cap Gemini. That effort places it in direct competition with Microsoft.

Of note to service providers: Microsoft has yet to make voice communications a major component of any of its online services, though that is clearly a possibility as it begins to push Microsoft Office Communications Server, which launched earlier this year.

Google, meanwhile, is hard at work integrating voice-based technology from its GrandCentral acquisition into its online application suite – though the fruits of that labor have yet to appear. GrandCentral lets users adopt “one-number” to manage multiple wired and wireless phones and permits cheap VoIP-based calling as part of its offering.