Microsoft Moving Towards a Real Office Cloud? Maybe.

As reported in IT World, Microsoft announced that its next generation MS Office suite (Office 14) will include Office Web Applications, a suite including lightweight versions of Word, Excel, and Powerpoint.

Signaling a potentially major shift in Microsoft's view of SaaS, the service will run in Firefox and Safari, as well as Internet Explorer, giving Microsoft office a means to run on Linux servers.

From the article and the announcement, it is still unclear if:

• Windows users will be able to run Office Web Applications in Firefox, or only IE
• If the service will require locally installed software
• If the service will require use of Office Live Workspace

While reports have the new service available in Beta later this year, the service will not launch until the release of Office 14 (which has not been announced).

Microsoft is clearly responding to threats from Google Apps, Zoho, and OpenOffice. Will Microsoft be able to shed many of its current licensing, pricing, and channel policies to effectively compete in an aggressive marketplace?