The Mesh lives but the cloud Office is vaporous

Microsoft pushed out a tech preview of its Live Mesh service, but is still holding back on delivering a more complete set of Office applications delivered from the cloud.

At this point, Microsoft has delivered Dynamics CRM as an on-demand, multitenant hosted service as well as hosted versions of Exchange and SharePoint. Tim O'Brien, senior director of platform strategy for Microsoft, said this week, "We have a huge portfolio of applications that we'll over time take in this direction," meaning that Microsoft is rearchitecting much of its software for multitenancy to run in its growing number of data centers. Multitenancy allows software to be delivered from the cloud with great efficiency, running multiple customers off the same instance.

Ray Ozzie's memo detailing Microsoft's vision for a future, with the Web rather than the PC at the center, didn't shed any new light on Office for the cloud. Microsoft is focusing on its software+services model, creating services--such as Excel Data Services, SQL Server Data Services and BizTalk Services--that fuse the Web and client software.

In the memo, Ozzie stated:

Office Live will bring Office to the web, and the web to Office. We will deliver new and expanded productivity experiences that build upon the device mesh vision to extend productivity scenarios seamlessly across the PC, the web, and mobile devices. Individuals will seamlessly enjoy the benefits of each - the rich, dynamic editing of the PC, the mobility of the phone, and the work-anywhere ubiquity of the web. Office Live will also extend the PC-based Office into the social mesh, expanding the classic notion of "personal productivity" into the realm of the "inter-personal" through the linking, sharing and tagging of documents. Individuals will have a productivity centric web presence where they can work and productively interact with others. This broadly extended vision of Office is being realized today through Office Mobile and Office Live Workspace on the web, augmented by SharePoint, Exchange, and OCS for the connected enterprise.

Ozzie is telegraphing that Microsoft will continue to add services, such as integrating a social layer into Live Mesh, but for now Office Live consists of Office Live Workspace and Office Live Small Business. Office Live Workspace works with Word, Excel and PowerPoint, allowing users to open and save files and access them from any computer via the browser. It also synchronizes lists, such as contacts and tasks, with Outlook. The Small Business version is for setting up and managing e-commerce-oriented Web sites.

Microsoft also has Windows Live services, such as Hotmail, SkyDrive, Spaces and Writer, but nothing approaching the Office (or Microsoft Works) suite or Google Apps or Zoho.

In the past Microsoft executives have said customers aren't asking for a cloud-based Office suite. Recent shifts in the market, such as Salesforce.com integrating Google Apps may alter that view sooner than later.

For now, Microsoft appears to be sticking to its view that downloadable client software is a long way from extinction. I wouldn't argue that point, but that shouldn't prevent Microsoft from also providing a collaborative, cloud-based version of Office applications for those who prefer that mode of operation. It doesn't violate the software+services mantra. It just leans more into the cloud, which is what Microsoft is doing. Let users have it the way they want it. Of course, things like messing with the super-lucrative desktop Office business may not be in the best interest of Microsoft's shareholders in the short term, but that is a slippery slope given where software is heading.