• The Wall Street Journal et al., Wednesday, May 12, 2010 1:43 PM

Upon the launch of Microsoft Office Web Apps -- the long-awaited "cloud" version of its Office suite of software -- industry wonks are asking the obvious question: What does this mean for Google?

No doubt, "The move is a nod to growing interest in Web-based applications among companies -- and Google Inc.'s success in wooing an increasing number of people, especially small-business users, with its Docs online suite," writes The Wall Street Journal.

"Adding Internet features gives Microsoft fresh ammunition against Google, which has targeted Office customers with its Internet-based Google Apps," writes Bloomberg/Businessweek.

Microsoft's new cloud service will be included at no additional cost with new 2010 versions of Office and SharePoint -- Microsoft's new Web-based collaboration software.

By June, Microsoft is expected to release a free consumer version, which will compete directly with Google Docs' free, ad-supported service.

Presently, roughly 2 million businesses work entirely on Google Docs, and 3,000 more are switching every day, Google tells The Journal. "And millions more use it on an ad-hoc basis to share individual files online, including Office documents," the paper reports.

Still, the enterprise market is "still overwhelmingly a Microsoft world," Sheri McLeish, analyst at Forrester Research, tells The BBC.

Indeed, "For all the noise about -- and from -- Google giving Microsoft a run for its money in the office/productivity market, the reality is rather different," writes ZDNet's Mary Jo Foley citing new Forrester Research data.

Forrester found that 81% of the enterprises it surveyed are running Office 2007 and 78% supporting SharePoint, compared to only 4% using Google Apps. Forrester also said that one third of survey respondents are already planning an upgrade to Office 2010 within the next 12 months.

"I still haven't seen many large businesses moving to Google," adds Foley. "In fact, Google execs admit ithe company only has a 'few dozen really large enterprises,' and keep touting Genentech as the poster child."

What's more, for Google Apps to truly threaten Microsoft -- and its entrenched desktop model -- cloud computing needs to become far more popular, analysts say.  

"Web apps in general are a threat to client apps," Roger Kay, an analyst with Endpoint Technologies Associates, tells eWeek. "But Web apps also require a cloud that is ubiquitous, reliable and high-bandwidth -- 'and that's not a reality today.'"

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