Nick Carr has a blog post entitled Eric Schmidt's tough talk where he writes

Google CEO Eric Schmidt has been coy in discussing his company's ambition to create an online alternative to Microsoft Office. Just a few days ago, at the Web 2.0 Summit, Schmidt "played the semantic game" in discussing office suites, reported Dan Farber. Schmidt claimed "that Google is developing applications for just 'casual' use. 'We don’t call it an office suite. It's not targeted at the [Microsoft] Office – we never made that claim.'"

But a very different, and much more aggressive, Eric Schmidt appears in the Economist's new "World in 2007" issue. Schmidt contributes an article titled "Don't bet against the Internet," in which he makes a striking prediction. Next year, he writes, "we’ll witness the increasing dominance of open internet standards." These standards "will sweep aside the proprietary protocols promoted by individual companies striving for technical monopoly. Today’s desktop software will be overtaken by internet-based services that enable users to choose the document formats, search tools and editing capability that best suit their needs."

It's refreshing to see Google stop playing coy and be straightforward about their ambitions. At the Web 2.0 conference last year, Sergey Brin was coy about their plans when questioned by John Battelle. Given Google's significant market valuation they need to be making a lot more money than they are doing now to satisfy the markets. What better than targeting a multi-billion dollar business of a fierce competitor which is ripe for disruption? 

Now that their ambitions have been laid bare, I really hope this changes Microsoft's Office Live strategy. A lot  of  people expected Office Live to be a hosted version of Microsoft's Office suite. It is clear there is a pent up demand to bring office applications in the Web era, however it is unclear whether the simplistic division of desktop versus web applications is the right way to view this evolution. I believe the truth is that there is a continouom in which these applications should live and some applications sit better on the desktop end (e.g. word processing) while others sit better on the Web end (e.g. email reading). Ray Ozzie has said similar things in his speech at a recent Microsoft Financial Analyst Meeting.

First a revamped UI for Microsoft Office and now Google jumping into the Web Office game with both feet? 2007 is going to be an interesting year for Office productivity software.

It looks like the big news this morning is that Google just announed Google Apps for your Domain. From the press release Google Launches Hosted Communications Services we learn

Google Apps for Your Domain, an expansion of the Gmail for Your Domain service that launched in February 2006, currently includes Gmail web email, the Google Talk instant messaging and voice calling service, collaborative calendaring through Google Calendar, and web page design, publishing and hosting via Google Page Creator. Domain administrators use a simple web-based control panel to manage their user account list, set up aliases and distribution lists, and enable the services they want for their domain. End users with accounts that have been set up by their administrator simply browse to customized login pages on any web-connected computer. The service scales easily to accommodate growing user bases and storage needs while drastically reducing maintenance costs.

Google will provide organizations with two choices of service.

• A standard edition of Google Apps for Your Domain is available today as a beta product without cost to domain administrators or end users. Key features include 2 gigabytes of email storage for each user, easy to use customization tools, and help for administrators via email or an online help center. Furthermore, organizations that sign up during the beta period will not ever have to pay for users accepted during that period (provided Google continues to offer the service).
• A premium version of the product is being developed for organizations with more advanced needs. More information, including details on pricing, will be available soon.

If this sounds familiar to you, that's because it is. This is pretty much the same sales pitch as Microsoft's Office Live. Right down to having tiered versions that range from free (i.e. Office Live Basics) to paid SKUs for businesses with more 'advanced' needs (i.e. Office Live Essentials). With Google officially entering this space, I expect that the Office Live team will now have some pressure on their pricing model as well as an incentive to reduce or remove some of the limitations in the services they offer (e.g. the fairly low limits on the amount of email addresses one can create per domain).

As usual, the technology blogs are full of the Microsoft vs. Google double standard. When Microsoft announced Office Live earlier this year, the response was either muted or downright disappointed because it wasn't a Web-based version of Microsoft Office. An example of such responses is Mike Arrington's post entitled Microsoft Office Live goes into Beta. On the flip side, the announcement of Google Apps for your Domain which is basically a "me too" offering from Google is heralded by Mike Arrington in his post Google Makes Its Move: Office 2.0 as the second coming of the office suite. The difference in the responses to what are almost identical product announcements is an obvious indication at how both companies are perceived by the technology press and punditry.

I personally prefer Om Malik's take in his post Web Office Vs Microsoft Office where he states

"Web Office should not be about replacing the old, but inventing the new web apps that solve some specific problems".

This is pretty much the same thing I heard Ray Ozzie and Sergey Brin say at last years Web 2.0 conference when they were both asked [on different occassions] about the possibility of replacing desktop office suites with Web-based software. Enabling people in disparate locations to collaborate and communicate is the next major step for office productivity suites. One approach could be replacing everything we have today with Web-based alternatives, the other could be making the desktop software we have today more Web savvy (or "live" if you prefer the Microsoft lingo). I know which one I think is more realistic and more likely to be acceptable to businesses today. What do you think?

My next question is whether Google is going to ship consumer targetted offerings as Microsoft has done with Windows Live Custom Domains or is the free version of Google Apps for your Domain expected to be the consumer version?

Disclaimer: The above statements are my opinions and do not in any way reflect the plans, thoughts, intentions or strategies of my employer.

From the blog post entitled Your 'wait' is over on the Office Live team blog we learn

Since we debuted our waitlist for the Microsoft Office Live Beta back in November 2005 we have had over 275,000 customers sign-up in our Beta waitlist, and we thank each and every one of them for signing up. But what we’ve heard over and over is: please don’t make me wait in a list; I want to try Office Live NOW!! So, good news to everyone who hasn’t already gotten a product key, your wait is over (maybe before it even started!)

We have dropped the requirement of a product key from our signup! The Beta is still only open to US residents for now, but ANY US resident with a valid credit card can sign up for the Beta and experience Office Live! All you need to do now is pick your product (Basics, Collaboration or Essentials) and pick your domain. So head over to www.OfficeLive.com now to get your Beta subscription started.

If you've been curious about Office Live and have balked at checking it out due to the waiting list, now's your chance. Let the product team know what you think.

Ask and you shall receive. The Office Live team now has a blog at http://spaces.msn.com/officeliveblog/. In the inaugural post entitled Hello, world! Samarth introduces himself and lets out that over 100,000 tried to sign up for the beta of Office Live when it launched.

That's what I call an eagerly anticipated launch. :)

Jason Fried of 37 Signals has a post critical of Office Live entitled Microsoft Office Live is "web based" where he writes

Office Live, Microsoft’s entry into the web-based office application space, went beta today.

Check out some of the system requirements for certain features of this “web-based” service:

• To use the Edit in Datasheet feature within the Business Applications and Shared Sites areas requires Microsoft Office 2003.
• To export to Business Contact Manager requires Microsoft Office 2003, Microsoft Office XP, or Microsoft Office 2000.
• To import contacts from Microsoft Office Outlook requires Microsoft Office 2003 or Microsoft Office XP.
• To link contacts to Microsoft Office Outlook requires Microsoft Office 2003.

And of course you must use IE. I never thought I’d see a web app suite that has more system requirements than a desktop app, but I guess I should never underestimate Microsoft.

A number of comments in response to the blog post have pointed out that it is misleading since it implies that Office Live requires Microsoft Office when in truth most of the features mentioned are related to importing and exporting data to and from Microsoft Office products like Outlook. Since the target audience for Office Live is the same as that for the majority of the products of 37 Signals it is unsurprising that they are so hostile to the service.

However this isn't to say that there isn't some valid criticism here. Jason is right that Internet Explorer is required to use Office Live. I also had an issue with this especially since in Windows Live we have an explicit goal that Internet Explorer and Firefox users should get an equivalent user experience. When I talked to the Office Live folks about this they pointed out to me that although Internet Explorer is required to create a site using the service, the websites created with it (such as http://daresofficelivesite.com) work fine in all major Web browsers. This is a good step but they know they can do better.

As it is with all feature requests in product development, the best way to get Firefox support to show up in Office Live is for users demand it. That's what happened with Windows Live and I'm sure the same will end up happening for  Office Live. I'm sure the question won't be if but rather when it shows up. 

David Hunter has a blog post entitled Microsoft relaunches bCentral, calls it Office Live where he writes

Press release:

Sept. 23, 1999 — Microsoft Corp. today announced the launch of Microsoft® bCentral, a new portal created specifically to meet the needs of small and growing companies. Microsoft bCentral provides a comprehensive and integrated suite of services to help growing companies leverage the Internet to improve their business. The site delivers services in three key areas: getting a business started online by connecting to the Web and building a Web site; promoting and marketing online to reach new customers; and managing a business more effectively. A beta version of the new site will be available in the United States beginning Sept. 30, 1999, at http://www.bCentral.com/ .

Change the menu a little and call it Office Live and you have today’s announcement:

Feb. 15, 2006 — Microsoft Corp. today announced the beta availability of Microsoft® Office Live (http://www.OfficeLive.com), offering small-business customers a cost-free opportunity to experience the company’s new Internet-based software services firsthand. A milestone for the online services previewed last fall, Microsoft Office Live combines the power of software and services to deliver rich and seamless experiences to small companies that want a presence online.

Microsoft Office Live helps lower the barriers to doing business online by offering small companies a set of Internet-based business services. Designed for ease of use and affordability, the online services are designed to give small businesses the same advantages as larger enterprises by getting them up and running on the Internet quickly, easily and inexpensively.

There were no surprises from the various “preannouncements” yesterday or even from the original Office Live announcement...So what’s with the Office moniker? There had been some expectations, despite all the clues to the contrary, that there were to be online versions of at least some of the Office products. Those hopes were dashed...The use of “Office” in “Office Live” apparently connotes business usage, and that’s it...So I guess we take it for what it is. There may well be a play in the hosted “intranet replacement” offering if they roll out some useful applications, but that’s a story we heard about the now defunct bCentral too (e.g. [1], [2]). Presumably, Microsoft thinks they’ll have more luck this time around, but it’s not clear why.

The folks working on Office Live have big plans for the service. The big question is whether our execs will let them execute on their vision or whether we'll continue to practice death by risk aversion.

Office Live is now live at http://www.officelive.com. As I mentioned yesterday, our team has been working closely with the folks behind Office Live. This means that I got the hook up with regards to early access to the service. I've heard it's okay to post screenshots so I'll be posting some with my review of the service. There are 3 basic SKUs of the service

1. Office Live Basics: This service makes it easy for a small business to create and manage its website. It features all the basics you need to create your first Web site including free Web hosting, Web site statistics, a personalized domain name (bring your own domain or get one through Microsoft), and up to 5 e-mail accounts for your domain.
   

2. Office Live Collaboration: This service makes it easy to store, share, and manage your everyday business information in one central online location. Users can create any number of password-protected Web sites for collaborating among internal employees and external customers, suppliers, and vendors. The service provides access to business applications for managing one's customer relationships, employees and project management.

3. Office Live Essentials:  A combination of the Basics and Collaboration SKUs with a few more benefits such as getting 50 email accounts instead of just 5 with your custom domain. 

Office Live is a mix of a number of core services a small business needs to exist today. It gives them a domain registrar, email hosting, internal and external web site hosting, as well as line of business applications all in a single place.

When I tested the service, I got myself an Office Live Essentials account. The sign up steps including choosing a domain name which was automatically registered for me by the service, providing my contact information, entering my credit card information and agreeing to the terms of use. The domain I created was http://www.daresofficelivesite.com/ which may not be available until a few hours after this posting. Below are some screenshots of the service, click the images for larger versions of the screenshots.

Member Center - Overview

Web Site - Overview

Web Site - Page Editor

Business Applications - Dashboard

Users & Accounts

In general I think Microsoft has a winner here. My girlfriend used to be a professional photographer and she definitely could have used a service like Office Live. It definitely hits the sweet spot for small businesses. 

However there is a bunch of work that needs to be done. As you can see from the screenshots, the service provides a lot of functionality and options. I think perhaps too much which could be overwhelming to the target audience of small businesses that are likely too small to even have an IT staff. I found features such as the business dash board a bit overwhelming. Another small gripe is that I couldn't set up email accounts because it kept giving me an 'invalid password' error when I tried to create an email account. I assume this is because I was using a weak password but it didn't say that. That was rather irritating and I gave up trying to create a new email account. Thus I couldn't get a screenshot to confirm that the user interface for the hosted email is that of Windows Live Mail. I know the folks behind Office Live will be eagerly awaiting feedback on their product, so give it a shot

I should probably see about asking some of these folks to start blogging if they haven't already. :)

Our team has been partnering with the Office Live folks and I've been pretty impressed at how far along they have come in a short time. I haven't been able to blog about their product yet but today I saw a post from Joe Wilcox entitled What Office Live Is Not which gives good insight into the goals of the product.

He writes

Last night, Microsoft lifted the NDA for Office Live, so I am rapidly blogging a day sooner than expected. Office Live goes live--at least in limited beta--tomorrow.

So there is to confusion about Office Live:

* Office Live absolutely is not a hosted version of Microsoft Office. People have asked me if Microsoft is hosting Office applications or would do so in the future. Answers are no and highly unlikely. I don't expect Microsoft to offer a hosted version of Office as part of Office Live. Ever. While Microsoft obviously is concerned about the Web 2.0 concept, the company is not going into the hosted applications business.

Most of the extended capabilities do functionally derive from Microsoft server software, such as Exchange, SharePoint and Project. The service provides basic e-mail and calendaring capabilities (such as might be seen from Exchange), collaboration functions (such as come with SharePoint Portal Server) and for working on projects (such as supported by Project Server).

Based on JupiterResearch surveys, Microsoft's target market of businesses with fewer than 10 employees would be highly unlikely to run server software products like Exchange, SharePoint or Project. Microsoft's approach extends those products' capabilities--and their potential benefits--to the smallest businesses. As those businesses grow, Microsoft has created opportunity for its partners to upsell server software that would maintain and extend Office Live capabilities. Smart.

For now, small businesses would largely consume these services in a Web browser. There are some ties back to Office products, and I expect to see more of these ties with the release of Office 12. I will discuss more of this in another post.

* Google isn't the target here and, in many respects, neither is the nebulous Web 2.0 concept. As I wrote back in November, "Microsoft hopes to generate greater customer value and make new-version Office and Windows upgrades more appealing. MSN has done a tremendous job cranking out new products and services, well ahead of the long Office and Windows development cycles. The point: If Google didn't exist, Microsoft probably still would have embarked on a services strategy."

Microsoft is probably more concerned about a Salesforce.com than a Google here. Microsoft's core business is applications and operating systems. Services like Salesforce.com negate the value of both applications and operating systems, territory Microsoft won't easily cede. It's no coincidence that CRM is a major Office Live feature.

Once the product goes into beta I'll probably do a review along with some screenshots [if the team doesn't mind]. There is definitely good stuff coming down the pipe here.