Nick Carr breaks down the evolution of Office suites

Nick Carr weighs in on the definitional debates about Office 2.0, or the post Microsoft Office era that is emerging, and offers his view of the evolution of office software:

Office 1.0 (1980s): a set of discrete and often incompatible applications for word processing, spreadsheets, presentation creation, and simple database management. Archetype: Lotus 1-2-3.
Office 2.0 (1990 - present): integrated suites of PPAs [personal productivity applicaitons], with expanded, if still limited, collaboration capabilities. Archetype: Microsoft Office.
Office 3.0 (present - early 2010s): hybrid desktop/web suites incorporating internet-based tools and interfaces to facilitate collaboration and web publishing.
Office 4.0 (c. early 2010s): fully web-based suites.

Nick also doesn't think that corporate users of Microsoft Office will stage a revolt, demanding a quick transition to Web-only applications.

Whatever the flaws of Microsoft Office, most end users are comfortable with it - and they have little motivation to overturn the apple cart. What is absolutely unacceptable to them is to take a step backward in functionality - which is exactly what would be required to make the leap to web PPAs today. Web apps not only disappear when you lose an internet connection, they are also less responsive for many common tasks, don't handle existing Office files very well, have deficiencies in printing (never underestimate the importance of hard copy in business), and have fewer features (Microsoft Office of course has way too many, but - here's the rub - different people value different ones). Moreover, many of the current web apps are standalone apps and thus represent an unwelcome retreat to the fragmented world of Office 1.0. Finally, the apps are immature and may change dramatically or even disappear tomorrow - not a strong selling point for the corporate market.

I agree with Nick on this point, although for smaller businesses and departments a collection of loosely coupled, lighter weight Web applications that perform the proper reading and writing of document formats can do the job, and displace parts or all of the Microsoft productivity software stack. Microsoft is not clueless, and is building a bridge between the old Office and the new Office. "Microsoft is taking a very pragmatic approach, a seamless, blended client-server-services approach...where services complement and extend Windows and Office applications to the Internet," Microsoft Chief Architect Ray Ozzie said. The bigger issues for Microsoft, as Nick and many others have pointed out, is how the company transitions its business model as more companies move to software as a service.

Google's attempts to create an Office and companies like Zoho will nip at Microsoft's heels, but the Redmondians have the clear advantage in the big corporate sector, especially if the company can execute on transitioning from 2.0 to 4.0, according to Nick's breakdown.