Microsoft is quietly rolling out its office applications in the cloud. They announced that the web-version of major Office applications are live, at least in a number of countries/languages. In Israel I could get it to work. Try for yourself here.
I have been following these in-the-cloud initiatives closely, and must conclude that Microsoft stands a good chance to be the winner. I chose Microsoft over Google docs for a recent project that involved collaboration in multiple countries.
It looks like the world is dividing into 2:
  1. Consumers and freelancers using Google Docs, iPhones, prezi, SlideShare, Windows 7 or Apple OS, gmail, freely sharing stuff over social networks and insecure internet connections
  2. Corporate workers using Blackberry, Microsoft Office 2003, Windows XP as a result of strict security guidelines and cost cutting in IT budgets (i.e., delaying upgrades of software). These people are struggling to find stuff in their bulging Outlook 2003 inbox.
The learning curve of switching user interfaces of Office applications is huge (read: costing a lot of money in downtime and helpdesk support), and for a big corporate to switch means that everyone is required to change habits: the 25-year old tech savvy analyst, the 60 year old secretary of the CEO, the CEO herself, to name a few. It's just hard to move them out of the Microsoft world.
Ultimately, the big corporates will move Office applications/data into the cloud, there are significant benefits to collaboration and simply finding stuff. They will go with Office Live though, and not with Google Docs...
There is another potential direction where this could go: the corporate equivalent of a facebook-style social network. Microsoft might well be the player who can pull this off. Not a place to share jokes and family pictures, but a tool for collaboration and information sharing in the enterprise.