Microsoft is looking to add new online features to its Office productivity applications within the next “year or so” in what would amount to a partial response to Google’s encroachment on one of its core businesses, according to a senior executive at the software company.

Jeff Raikes, head of the business and server divisions, said Microsoft would offer online services that extend the capabilities of the desktop software suite used by an estimated 500m people, although he refused to give further details.

The most likely first step will be to let Office users share documents and spreadsheets they have created on their PCs over the web, according to analysts. That would overcome a key shortcoming of Microsoft’s applications when compared with web-based packages such as those run by Google, said Rob Helm, an analyst at Directions on Microsoft.

Full online versions of Microsoft’s Office applications are likely to follow, but only three years or more from now, Mr Helm added.

Microsoft’s relatively slow response to Google, which offers a set of web-based word processing, spreadsheet and other applications that mirror the Office suite, indicates its belief that users will be slow to desert desktop software for the web.

“I remember the days when people said: ‘retail will die because of online commerce’. Well, actually, retail is pretty healthy in the last few years,” Mr Raikes told the Financial Times.

Google signalled two months ago that it was preparing to step up its challenge to Microsoft’s traditional PC software business. Eric Schmidt, chief executive officer, said the internet company had expanded its mission to make online applications a core part of its business.

Source: Financial Times

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