Microsoft have launched a fully web based software for their Office 2010 corporate software – the Office 365 suite of programs. This was launched at a high profile ceremony in New York recently. It was beta-tested by 200,000 organisations over the last nine months, and according to Microsoft, these organisations reported a 50% increase in productivity during this period. This is in an effort to respond to growing demand for software hosted in the cloud rather than on a hard drive. Office 365 is aimed at small businesses and will cost $6 per month per user, compared to Google Apps and Docs at $50 per user per year.

This is the first time Microsoft will sell a web based version of Office 2010. The original version released a year ago reported sales rising to $5.27 billion last quarter exceeding the earlier estimated $4.9 billion. This is their most optimistic unit as it may turn out to be the biggest in terms of revenue generation. Currently Microsoft offers a free consumer edition of Office Web Apps, which is a watered down version of the well known Office Applications. Microsoft reports 50 million users for their programs.

Google is not far behind, as it counts 3 million corporations and other companies among its many customers. With a free version for its consumers, they claim 30 million total active users.