The beta version has seen over 1.3 mn downloads; over 2,000 firms in India are moving to the latest version.
Last September, research firm IDC had cautioned that while Microsoft Office still held the lion's share of the market for office productivity suites, Google was rapidly gaining ground.
The survey indicated that 19.5 per cent of the respondents were in organisations that used Google Docs in some form, up from 5.8 per cent a year earlier.
Google Docs, unlike an offline suite, offers its services on the cloud - a metaphor for internet.
The market opportunity is huge. IBM, for instance, pegs the global market for cloud computing services to be worth $126 billion by 2012. The global market was $48 million in 2008, according to the information technology major.
Microsoft sought to plug this hole in the cloud by unveiling its Office 2010 a couple of days back.
The suite includes "Web Apps", which allow business users to store documents centrally and access them anytime, from anywhere, similar to online office suites like Google Docs and Zoho.
It is in beta for individual users till mid-June. The professional version of the software would be available at Rs 20,000 and the consumer and SMB versions at Rs 5,000 and Rs 10,000, respectively.
"The response to Office 2010 suite (which includes Web Apps) in India has been excellent," said Rajan Anandan, managing director, Microsoft India. He adds that Web Apps can easily match the online offerings of competing players, primarily online search giant Google.
The beta version has seen over 1.3 million downloads and over 2,000 companies, including Tata Consultancy Services, Lowe Lintas, Virgin Mobile, Mindtree Consulting and Infosys Technologies are moving to the latest version.
Office 2010 will help people collaborate online and offline with ease, said Anandan. He, for instance, no longer uses a phone in his office. "Hardly anyone at Microsoft uses a phone anymore," he quipped. Instead, Anandan uses his company's Unified Communication collaboration tools to take calls (with voice over internet protocol or VoIP), structure messages, set up and attend web conferences, and exchange notes.
The power of these collaboration tools is being extended to the cloud, too, with Office Web Apps, according to Anandan. "Imagine the cost savings from UC tools for companies," he said, adding, "Now think of Office 2010 and Web Apps that can increase that savings manifold for enterprises and small businesses by taking the offerings to the cloud, thereby reducing costs and increasing productivity."
The new edition of Office 2010 has new features that enable users to embed videos in PowerPoint presentations, have voice-to-text conversion for voice mails on Outlook or see trends for a select set of information (and not the entire document), said Anandan.
The new suite also allows co-authoring of documents simultaneously on multiple workstations. Different people can connect simultaneously to view documents and make changes in real-time.
"Over the last 12 months, our strategy has been to sharpen focus on cloud services. Office 2010 was a logical conclusion," said Anandan. Microsoft, he added, offers cloud services across three layers in India.
The first is "Software as a service", or SaaS, which includes Microsoft Online Services with over 600 commercial customers in India and over 10,000 seats. Its partners include HCL Technologies, Infosys Technologies and Wipro Infotech. They provide the value-added services. Microsoft's hosted ERP partners include RoboSoft and Net4India.
The software giant also has a cloud offering named PaaS, or "Platform as a service". This revolves around its recently-launched Windows Azure Services platform in India.
HCL Technologies uses Microsoft's management application developed on Windows Azure to help customers manage data. Likewise, Sportz Line has migrated an industry-leading sports analytics application to provide real-time data to teams. Two cricket teams in Indian Premier League are its customers.
"Infrastructure as a service", or IaaS, is the third cloud-computing offering from Microsoft, according to Anandan. It has a partnership with Reliance Communications (RCom) for cloud computing services, wherein it provides enterprises and SMBs in India access to a variety of enterprise-scale IT solutions, applications and services on the pay-as-you-go model.
These include server hosting, data storage and archival. Microsoft's virtualisation (a technology which helps companies reduce the number of servers and, hence, hardware costs) and management technologies have helped RCom reduce input costs involved in providing these services.
The concept of collaborating in real-time on the cloud, or internet, is not new. Online developers like Zoho, Upstartle, 2Web Technologies and 37Signals use internet to allow collaboration. For instance, if a file is hosted on the web, rather than a local server or a desktop, one can allow several users to read and write from it at once.
Online giant Google took the concept a step further with its free Docs office suite (it rolled out an updated Docs service last month which features enhanced collaboration tools) that offers support for real-time collaboration.
Office 2010, too, enables real-time collaboration, either from the Office desktop applications or the all-new Office 2010 Web Apps. In addition to the Outlook updates, there are new PowerPoint tools for internet-based presentations and handling videos.
The new "Broadcast Slide Show" tool is expected to be the most-used new feature of PowerPoint. Windows Live also will run Web-based versions of the Office software, as part of the company's SkyDive service.
However, Microsoft, according to Anandan, does not see these cloud offerings replacing personal computer software. "We see them as complementary offerings," he said. The online versions will be geared toward tasks best done online, such as collaborative editing. The PC software will be where people will continue to go to create documents, spreadsheets, and PowerPoint decks.
Globally, over 8.6 million people use Office 2010 and related products. Office Mobile 2010 will soon be available on Windows 6.5 mobile handsets and on a broad range of Nokia smartphones starting with Nokia's business-optimised range, E-series.
Meanwhile, Google, which created cloud-based rivals to Word and Excel, is cajoling business users to switch to those instead of upgrading to Office 2010. Microsoft, which has nearly 95 per cent of the market for office software, however, is not taking things lying down.