Google Docs adoption Increasing

ome big companies are starting to move their spreadsheets, word-processing and other productivity programs off of PCs and on to the Web.

About 20% of respondents to a study by researcher IDC say Google's (GOOG) Google Docs offering is widely used in their organization, up from 5.8% a little more than a year and a half ago.

This good news for Google has not gone unnoticed at Microsoft (MSFT). The software giant last week said Office Web Apps — lightweight versions of Office programs delivered through the browser — will enter a limited technical preview. Invited participants will test Word Web App, Excel Web App, PowerPoint Web App and OneNote Web App through Windows Live.

Google markets free and paid versions of Google Docs. IDC analyst Melissa Webster surveyed 262 respondents in diverse roles at a broad range of companies; 27% said they are either already widely using Google Docs or expect to be a year from now.

The suite is proving popular as a tool that enables several co-workers to edit content in real time.

"A healthy percentage of Google Docs adoption is coming from ad hoc use," Webster says. "It's the classic case of employees making use of free consumer (online) services to get their work done, without asking permission."

No one knows how fast the market for online productivity programs will grow. IBM sells Lotus Symphony and Lotus Live as an online suite; Zoho offers free Office-like tools popular with students.

One thing is clear: Microsoft has a lot at stake. Its business division, made up primarily of Office, generated revenue of $18.9 billion and operating income of $12.4 billion in 2008.

Chris Capossela, Microsoft's business division senior vice president, says Office 2010, due early next year, will have versions that work on Web browsers — and on Windows Mobile smartphones. "We believe the future is about delivering the best experience on the PC, mobile phone and the browser," Capossela says.

Still, Microsoft must walk a fine line between staving off Google and not cannibalizing sales of its bread-and-butter Office desktop software, says Matt Rosoff, tech industry analyst at research firm Directions on Microsoft.

You can bet Office Web will work with Microsoft servers that drive many corporate networks. The look and feel will be familiar to Office desktop users. For corporations already holding Office and SharePoint licenses with upgrade rights, adding Office Web might be inexpensive, Rosoff says.