Microsoft may have been slow to respond to the flood of Web-based competitors to Office, but it isn’t hard to see why. A Web-based version of Office could cannibalize the existing (and profitable) sales of Office products, but doing nothing will simply cede a potentially lucrative future market to Microsoft’s competitors. After realizing that Web-based office applications aren’t going away, Microsoft has developed what it believes to be a winning strategy: “Software plus Services.” Described as a mix of the company’s existing client-based software with newer server-based applications, the objective of the Software plus Services strategy is to maximize the benefits of both mediums, teaming the security, speed, and reliability of existing offline Office applications with online services that provide document sharing and collaboration.

The first tangible manifestation of Microsoft’s strategy is Microsoft Office Live Workspace (shown in Figure A), an online service (currently in beta) that lets Office users upload and share Office documents. There are some caveats: Users are required to have a version of Office installed in order to edit and save documents, and the lack of online editing capability is a curious oversight.

Based on my experience with the beta version, Office Live Workspace provides some interesting features (especially the ability to store common documents for later editing at a different location with a different PC), but lacks others—such as the absence I mentioned of the ability to create and edit documents online, a feature that all the products in this comparison offer. The interface should be familiar to Office users, and as a first stab at providing for Web-based sharing of Office documents, it’s a passable effort.

“Office Live Workspace will provide anywhere- access to Office documents, including Word, Excel, and PowerPoint files,” Jeff Raikes, president of Microsoft’s Business division, has said. “In other words, these documents will go wherever people go when they’re away from their usual desktop.”

Granted, the ability to upload and share documents has been done before (specifically, by Google), but the tight integration between Office and Office Live Workspace could address criticism that Office doesn’t offer robust document- sharing functionality. The Office development team hasn’t been idle, and we’re bound to see more updates and improvements over the coming months and years. The next version of Office might still be a long way off, but it’s clear that tighter integration with the Web will be a given.