Will Microsoft Shoot Itself In the Foot With Office 2010?

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A free online version of Office is a good weapon against Google Docs and other free office tools – but won’t it dent the sales of the full Office 2010 package?

Microsoft Office 2010, the newest version of Microsoft’s office productivity suite, will be launched as a free online service for subscribers of Microsoft Live.

The move is a potentially radical one for Microsoft—a company whose market dominance has traditionally been based on desktop-centered applications—and represents a direct counter to Google and other companies that have rolled out cloud-based productivity applications over the past few years.

OneNote, Excel, Word and PowerPoint are the parts of Office 2010 that will be rendered accessible online, although the cloud-based versions will not replicate all the features available in the full versions. In addition to access through Windows Live, Microsoft also plans to offer Office 2010 as both a hosted subscription service and an on-premises application.

“A lot of customers aren’t just ready to move to the cloud in one shot,” Takeshi Numoto, corporate vice president of Microsoft Office, said in an interview with eWEEK. “We provide an option that says, if you want us to host it, of course we’ll host it; but if you want more control than you get with a hosted service, [there are other options].”

No pricing details

Numoto declined to mention any data related to potential uptime for Web-based versions of Office. Although he reiterated that the Microsoft Live version of Office 2010 will be free, Numoto also declined to mention any potential price structure for the hosted or on-premises versions.

In a step that demonstrates the rising primacy of applications that run via a Web-based interface, even versions of Office 2010 running from an on-premises data center will be made accessible through the browser.

Microsoft demonstrated Office 2010 at its Worldwide Partner Conference, beginning yesterday in New Orleans, and delegates were given a preview version to try. Other products shown included Windows 7, Silverlight 3, Windows Mobile 6.5 and Windows Server 2008. The accompanying lineup of speakers includes Microsoft CEO Steve Ballmer and former General Electric CEO Jack Welch.

Office 2010, along with SharePoint Server 2010, Visio 2010 and Project 2010, are now at the technical preview engineering mileston