Microsoft, which has built a $20 billion business out
of its MS Office suite of tools, has decided to give them away for free.MS-Office

The company today announced plans to release a free version
of its Office software that users can access over the Internet. The version
will be released in the first half of next year, in conjunction with the retail
release of Office 2010.

Versions of MS Word, PowerPoint and Excel will be available
online.

It’s a surprising move by Microsoft, but one that was likely
inevitable.

Office remains the dominant desktop software package on the
market, but it has been fighting the move from desktop to Web for several
years. In 1996, Google launched a free competing product online that has built
a small, but notable, following of users. (Corporations have typically stuck
with Microsoft’s products.)

The web applications will be ad supported, which is a slight
deviation from Google’s model.

Don’t view this as a surrender by Microsoft or a
capitulation to the inevitable. Businesses will likely stick with the desktop
applications for the foreseeable future, with security of sensitive documents
top of mind.

A migration to Web-based office software over the long term, though, is likely
to continue – and this will begin to give the company a chance to establish a
foothold and better position it against any threat from Google.

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