Microsoft gets a pretty bad rap around the blogosphere. I've always found it fascinating that a company like Microsoft, which has managed to survive, and some would say flourish, in a variety of economic conditions is dismissed by so many people. That's not to say that Microsoft hasn't made mistakes, because it has. The delay of Vista, its inability to break into the search market and the way it has haphazardly branched out into many verticals, can all be considered strikes against it. But recently, Bill Gates & co have been talking up the model of software as a service. Google's acquisition of Writely and its own offerings have caused speculation that Google is going to try and hit Microsoft where they are most valuable, in their office suite. Google has been hailed as inventive, while Microsoft has been labeled as the copycat without any original ideas.
Not only do I think this is unfair, I think that Microsoft is going to be in a better position than Google in the next couple of years when it comes to a "web office". LiveSide reported that Microsoft is looking at ways to bring Office Live to the mobile space. If they can do that right, then that could be huge for customers. Imagine business users running a Rich Internet Application version of Word or Excel on their mobile devices. A purely web implementation of this would be clugy and difficult to do across the wide range of devices that exist today. However Microsoft, with WPF on the horizon, will have a standard way for developers to write applications for Vista and their devices. There is immense value in this because once you break these applications out of the web browser, you open up access to underlying OS APIs as well as free yourself from the question of what will render correctly in the browser. For mobile devices, the web browser model becomes even more problematic.
If Microsoft can deploy their .NET framework and WPF to other machines, then business adoption could be very significant and business will continue to use Microsoft's office suite. It is going to be very difficult to get business to adopt the software as a service model through a web browser. Inherently, web browsers are less secure, not standardized, and perform poorly on devices. If businesses have he option of deploying a rich internet application as their office suite, adoption is much more likely. With RIAs you get the power of the web: the connectedness and the ubiquity, but you can still provide a compelling, engaging user experience similar to one on the desktop. With WPF, I think Microsoft may be two steps ahead of Google in the race to provide office as a service.