It's official: Google acquires Writely

The bigger news comes from reading between the lines.  This acquisition is essentially positive affirmation that Google is indeed planning to directly go after Microsoft's traditional office productivity product lines, which are also Microsoft's most profitable.  Of course, there's actually a plenty of convergence and overlap in the online software space as Microsoft in turn attempts to usurp Google's search dominance.

So, though Sergei Brin has previously disavowed the development of a Google Office suite, it's patently clear that Google is ready to enter the space now. 

At the moment, while still available to existing users, Writely has been closed to new signups as it moves over to the Google server infrastructure, but expect that the product will continue to evolve and mature with Google's considerable R&D resources.

Thus, online software wars have begun in earnest and the outcome will partially determine the future direction of the software industry. There's no question that native software will never go away completely, but connected, online, social software has a compelling lure that is too good to resist. And it fits increasingly into the future of software as many people now see it. 

And online software can play so well together with our modern IT infrastructures via Web services and SOAs while freeing us from maintenance, upgrades, data synchronization, backup, and much more. 

But will big players like Google really usher in the disruption of traditional business applications? That's just one of the big questions out of all this and it'll be fascinating to watch.

The other big question is what will customers actually do with this.  Will enterprises ever really bet their businesses on SaaS?  That's a lot of trust.

What will be next "Google Office" acquisition?  Dan Bricklin's wikiCalc?  NumSum?