Microsoft takes Office to the cloud

Oct 19, 2010, 23:31 GMT

San Francisco - Responding to increased pressure from Google, Microsoft on Tuesday announced a web-based subscription service of its popular Office productivity suite.

'We designed Office365 to work for a business of one - or a business of one million and one,' said Kurt DelBene, president of the Microsoft Office Division.

DelBene characterized the move from desktop software to cloud, or internet-based software, as one that was as significant as the shift to a graphical user interface a generation ago.

The Office365 suite includes online access to all the familiar Office software such as Word, Excel and PowerPoint, as well as enterprise-level tools such as Sharepoint, Exchange and the unified communications software Lync.

Along with the Windows operating system, Office is Microsoft's main cash cow. But the company sells most of the software only when its customers upgrade, and the new subscription system will allow it to create a more regular and predictable income stream.

For clients, the server-based software means that they always get the most updated version of the programs without having to deal with installation and other technical issues, DelBene said.

Microsoft will charge large companies 24 dollars a month per user for access to Office365, while small companies would get the same package for as little as six dollars.

Google offers its hosted Google Docs and Gmail for free to consumers, and also sells a business version, known as Google Apps, for 50 dollars per user per year.