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Some of Microsoft's most lucrative consumer and enterprise products - including Office - will be available on the web

Microsoft has launched its most audacious attempt yet to seize the initiative back from Google in the race to harness the internet as the computing platform of the future.
The software giant announced that from today, one of its most lucrative products, the Office Suite, will be available online, meaning that consumers will be able to create, write and store Word and other documents on the web.
The release of a web-based version of Office comes just a day after Microsoft said it would offer web-based versions of some of its enterprise products, including the e-mail program Exchange, meaning that companies will no longer have to buy expensive servers to run their employees' e-mail accounts. Instead, their workforces will be able to access e-mail stored on Microsoft's servers.
Microsoft's aggressive foray into the new web-based model of software delivery marks yet another attempt to catch up with Google. Its great rival has already launched a suite of Office-like applications, called Google Apps, which allows users to create and store documents online.
Microsoft, which is also still fighting a battle to seize control of Yahoo! following a $45 billion takeover bid, is concerned that Google is well placed to exploit the new trend of delivering software via the internet, having already stolen a sizeable lead in the the market for online advertising.
One of the new Microsoft products, called Office Live WorkSpace, allows people to create and store Word documents, Excel spreadsheets, and PowerPoint presentations online, and share them with friends and colleagues. The idea is that if the documents are stored online, they can readily be accessed on any computer, and can also be shared with others without having to be sent around as e-mail attachments.
Similarly the new version of Exchange will mean that companies can manage their employees' e-mail accounts as well as calendars, contact lists, video conferencing and other functions without needing to buy an expensive server that sits on their premises.
Microsoft has not disclosed pricing for its new enterprise software, but according to an analyst at Gartner, the typical cost to a large company of buying and running a Microsoft server is $9 per user per month. By comparison, Google's suite of products for businesses, which offers e-mail as well as document and spreadsheet programs, costs $4 per user per month.
It is unclear whether Microsoft will change the licensing fee it charges for Office - which is recouped when consumers buy a computer - now that the program is available online, though analysts have suggested that the effect of the new offering is likely to be "revenue neutral."
In the most recent quarter, licences for programs such as Office 2007 and Windows Vista accounted for 56 per cent of Microsoft's revenues, which were $16.4 billion.
"This is the start of a fundamental shift in the way computing is done," Matt Cain, a senior e-mail analyst at Gartner, said. "For the last decade and a half, Microsoft has had a near monopoly on the whole software market. Now that an alternative model is emerging, we're starting to see new vendors enter the market, namely Google, and Microsoft is going to have to fight tooth and nail to hold its position.
"There's still going to be a predilection among consumers for brands like Outlook, Word and Excel, because consumers are familiar with them and because - from a technical point of view - they're still better than the other offerings, but Google is going at 100 miles an hour to catch up."
Last week, Google ratcheted up the pressure on Microsoft with the launch of Google Sites, a program which which allows employees to create websites on which they can present documents as well as videos and other material, and which will sit alongside other programs in the Google Apps suite.
More than 500,000 companies have already signed up for one of the free or paying versions of Google Apps, and about 2,000 new organisations are signing up each day, Google said.
The emergence of the model for software delivery where customers pay a monthly subscription to access programs - rather than a licence fee for every copy they buy - has sparked a flurry of acquisitions among larger software firms as they put together new web-based portfolios of products.
Last month, Dell bought MessageOne, a provider of online e-mail archiving and management services, for $155 million.
In September, Yahoo! bought Zimbra, a web-based competitor to Microsoft Exchange, for $350 million, and Google bought Postini, the e-mail filtering and security firm, for $625 million. In March last year, Cisco, the networking equipment firm, bought WebEx, a supplier of online conferencing software, for $3.2 billion.