Google Documents get an upgrade

In a challenge to Microsoft's dominant position in office productivity software, Google on Monday began offering an array of upgrades to its Internet-based office applications, including the ability to have as many as 50 people work simultaneously on a piece of writing or a spreadsheet.

The upgrade to Google Documents comes just weeks before Microsoft begins rolling out its Office 2010 software to businesses, a crucial release for the Redmond, Wash., software giant, when it will introduce new versions of its Office and SharePoint products that also will allow workers to do real-time collaboration.

The Google Docs upgrades will roll out to users over the next few days. They are designed to make the company's Internet-based word-processing and spreadsheet products faster and more functional, adding basic writing features like automatic spell-complete and tab stops. But perhaps the most significant addition is to allow a large group of people to cooperatively draft a contract, or to analyze a sales problem with a spreadsheet, in real-time.

"It's a little bit of an in your face to Microsoft, because Microsoft is adding co-authoring into its 2010 package," said Melissa Webster, an analyst with the research firm IDC. "Google is upping the ante in an area where they are particularly strong, right before Microsoft's launch."

Google Docs has long allowed for the sharing of documents among multiple users, but there was a limited ability to have two or more people work together on the same thing at the same time. In the new version, everyone sees the changes as they are typed in. The feature will include an instant messenger component, identifying who is doing what action and allowing collaborators to comment on revisions.

"You all know you're working on the same version of the document," said Jonathan Rochelle, a group product manager for Google who said Docs offers a superior platform for collaboration than Microsoft's package.

A Microsoft executive countered that the company's collaborative features would offer a key feature Google doesn't — the ability to run its software either within an organization's network, or on the Internet "cloud."

"If you're the CIA, you don't want to use our data center; you want to run this yourself," Microsoft senior vice president Chris Capossela said in an interview. In terms of the privacy and security of their data, "many people still have questions about the cloud."

Microsoft also said it would offer many functions, like the ability to cut and paste across applications, that Google Docs does not.

Microsoft's Office software has the dominant position among business users, with about 100 million licenses, and its office and related business software comprises almost one third of the company's sales. Microsoft plans to begin rolling out Office 2010 to businesses in mid-May. In terms of importance, it's "the biggest release we've ever done," Capossela said.

Ted Schadler, an analyst with the research firm Forrester, said that for most people, choosing between basic software tools like word processing, spreadsheets and calendars won't be an either-or decision between the two companies.

"We're all comfortable using multiple tools," Schadler said. "My personal feeling is this is not going to be as much as a displacement strategy for Google, as it's going to become an extension strategy."

Webster said the intense competition is sure to benefit one group — users.

"It's a really interesting battle here," she said. "Competition always fosters great products."