Will An Online Microsoft Office Kill Google’s Office Dreams?

Randall Kennedy is out today with a bold prediction, "Office will clobber Google Apps, eventually driving the search giant out of the hosted applications business altogether." He says that there are three major reasons this will happen: full office functionality, true offline access and the future of windows application development is the streaming office.

 Will there be a showdown between Google Office and Microsoft Office? Sure. Will Zoho play a part in this showdown? Yes, if Yahoo acquires them which I think might make sense. IBM could also make a run for Zoho. However the showdown won’t only be about the office suite – it will be about the full Web offering. The full offering includes more than just the office, other products like advertising, analytics, social media, search, local, travel, etc will be included in the battle. This is where the real showdown will take place. On the grand Internet stage, not on the smaller office suite stage.

Both Google and Microsoft will continue to add features while keeping the cost as low as possible and even take an income hit to move user adoption up. Both companies have very large bank accounts and the battle will certainly put some amount of hurt on their free cash.

Just wait until the Google and Microsoft salespeople sell-in full, exclusive packages. That’s where the real blood will start gushing.