Microsoft Corp launched an updated version of its Office software on Wednesday, aiming to keep its grip on the hugely profitable business application market while countering the challenge of free online alternatives from Google Inc. The world's largest software company is upgrading its popular Word, Excel, Outlook and PowerPoint applications and rolling out its own online versions to keep up with the new class of mobile, Web-connected users that has emerged since the last upgrade in 2006. Microsoft announced several improvements Wednesday, such as editing photos in Word, using video in PowerPoint, collaborating on documents and connecting email contacts to Facebook information. But the biggest change is Microsoft's move into the “cloud” - allowing users to manipulate documents stored on remote servers from anywhere - where Google has been setting the pace. Corporate buyers of Office will have immediate access to Microsoft Office Web Apps - online versions of Word, PowerPoint and Excel programs for Internet-connected phones and PCs - but will pay more to use them. Ordinary consumers will be able to use online versions free from next month through Microsoft's Windows Live service, which the company is hoping will entice customers to pay for the full software, which will cost between $100 and $500, depending on the level of features. The online strategy marks a major shift for the Windows franchise which has so far relied on software installed on PCs. It brings Microsoft into direct competition with Google Docs, stripped-down alternatives to Microsoft's core programs, which are available over the Internet with no need to download software. They are free for personal users and $50-per-user per year for companies. Google says it has picked up 25 million users since launching Docs almost four years ago. Stephen Elop, head of Microsoft's Business Division, said in an interview at an Office launch event in New York, that he hopes customer adoption for Office 2010 will be the quickest ever, as companies start to replace aging machines this year and may decide to upgrade to the new Windows 7 system and Office 2010 at the same time. He said 8.6 million people are already using Office 2010 in test versions. Google, meanwhile, fired a shot directly across Microsoft's bow with a blog post urging people who are “considering upgrading Office with Office” to “consider an alternative: upgrading Office with Google Docs.” “Google Docs has been providing rich real-time collaboration to millions of users for nearly four years,” said Matthew Glotzbach, Google's enterprise product management director. “It lets employees edit and share documents, spreadsheets, and presentations in the browser from anywhere in the world,” he said. “Google Docs represents a real alternative for companies: a chance to get the collaboration features you need today and end the endless cycle of ‘upgrades.'” Alex Payne, director of Microsoft's online product management team, rejected Google's claim saying “the argument that ‘Google Docs will make Office' better is simply not true. He points out in a blog post that “charts, styles, watermarks, fonts, tracked changes, SmartArt, etc. (can be a pretty long list) might be gone or manipulated in a way resulting in something that doesn't look like it did before conversion.” - Reuters Culture clash: Office 2010 v. Google DocsBy Tony Bradley PC World I did some quick testing of how the two work together. First of all, Google Docs limits the file size for uploads to 1mb. Granted, that is plenty for most office productivity files, but large docs, or multimedia presentations may quickly exceed 1mb, making it impossible to upload and work with the files in Google Docs. I uploaded a lengthy Word doc, complete with a variety of formatting options and was less than impressed with how it renders in Google Docs. Technically speaking, the text was there, and I was able to edit and work with the file, but the visual aesthetics of the doc were completely jacked. I made some changes, then re-imported it back to Word and found that my impression didn't get any better. My nicely formatted and visually appealing Word doc now looked exactly as it had on Google Docs. The Table of Contents was converted to some rudimentary looking list of links, and the footnotes - which were previously at the bottom of each page where they were referenced - were now collected all together at the end of the document. I tried coming at it from the other direction. I created a new doc in Google Docs, and then added some more advanced formatting such as footnotes. I am not a fan of the way the footnotes are portrayed in Google Docs - as a little pop-up box on the side of the document display. However, it was worse when I exported it to Word and instead got a separate page titled “notes”. With all of the claims of improved document fidelity and seamless integration, it seems odd that Google Docs isn't even consistent about the way footnotes are rendered when exported from Google Docs to Word. Don't get me wrong. Google Docs does a number of things - particularly real-time online collaboration - better than the Office Web Apps, and Microsoft certainly has room for improvement on its first venture into Web-enabling its Office suite. But, trying to work with Office 2010 and Google Docs together is just a dysfunctional culture clash that actually creates more work in trying to recreate the doc each time its migrated from one to the other. Those who use Google Docs as their primary office productivity apps - and don't need all of the additional features and capabilities found in Office 2010 - should just continue happily using Google Docs. Those who rely on Microsoft Office, but also want to be able to work from the Web, should stick with the Office Web Apps. Google Docs is a perfectly capable alternative for companies focused on cost - a poor man's Office. It will fill the role admirably for many SMB's, but the lack of control and potential compliance and security concerns of data stored in the cloud may deter larger corporations from taking Google Docs seriously. The bottom line is that Google Docs is not a threat to Microsoft Office, and won't be any time soon. The two represent completely different operational cultures, and Microsoft has a comfortably dominant stake in the office productivity market.
