The upside for Microsoft is Google completely failed to capitalize on their head start with Google Docs. An online version of Office is going to be huge for Mic

The upside for Microsoft is Google completely failed to capitalize on their head start with Google Docs. An online version of Office is going to be huge for Microsoft. People who wouldn't pay $300 for Office 2010 may pay $30/year for more storage and features of an online version. The free version is a gateway not only to an up-sell a Pro version but also to other Microsoft web services. In my opinion Google basically handed Microsoft a golden opportunity to extend their 2nd biggest product to the web by failing to develop Google Docs into a legitimate, fully featured, online office package. They forced Microsoft's hand, sure, but they are doing them a favor too by forcing them to change their business model in a good way. This is finally a service where Microsoft will have an opportunity to compete with Google toe-to-toe without the disadvantage of being late to the game.