I’ve long been skeptical that anyone is going to be able to build a free/cheap Microsoft Office alternative that will be able to compete with Microsoft, but I really do think it’s starting to happen.

I’ve started tinkering around with Google Docs recently, and it’s great. The functionality is minimal compared to Microsoft Office, but I never used 90% of the bells and whistles that it comes with anyway. And the benefits of having it hosted are fantastic:

• Easy to share with others
• All of my files are automatically being backed up
• I can work on my files from any computer with internet access

If you are just starting a business and need to bootstrap as much as you can, or if you have company that has multiple offices or a lot of travelers, you should seriously consider Google Docs or Google’s competitor Zoho. Zoho has many different applications, and they are winning awards for how good they are.

Microsoft isn’t going to roll over and give up its billions of $ annuity stream anytime soon - expect a good fight in this space with the consumers as winners!