The office 2.0 space got crowded today with the news about Microsoft’s online office suite and Adobe’s acquisition of Buzzword and its release of Adobe Share. Techmeme is buzzing along with the news from Adobe and Microsoft. The online office space is pretty crowded now and it bodes well for consumers as competition drives innovation. Let us try to make sense out of the current chaos in this space.

Let us do a quick recap of various online office services available to consumers. The competition in this space is pretty heated up with both bigger and smaller players vying for the marketplace. The big companies in this space includes

• Google with its Google Docs and Spreadsheets. This suite has word processor, spreadsheet and presentation application available. Users can both collaborate and share with others. Google also has a hosted version for user’s domains called Google Apps for Domains. This will come handy for individuals, small businesses, educational institutes and even enterprises.
• Microsoft is planning to offer an online office suite. This service is currently on an invitation-only beta and we don’t have much information about their offerings except that users can edit and share word documents, excel spreadsheets and power point presentations. But there are some rumors that the users can edit the documents only if they have Microsoft Office installed on their computers. I doubt if Microsoft will do anything dumb like this.
• Adobe today acquired the Boston based startup called Virtual Ubiquity, the company behind the online office service called Buzzword. Buzzword is an awesome flex based online word processor. Adobe also released Adobe Share service for document sharing. I am pretty sure both these services will be integrated into Adobe’s suite of online office apps. We should note the words of Adobe Evangelist, Ryan Stewart, in this regard. He says that “We’ve got a kick ass word processor (with some legitimate limitations) but we’ve also got a great document format (PDF) and a ubiquitous platform (Flash). Combine those two things and you’ve got a TON of potential”. This is very true. Buzzword acquisition and the release of document sharing feature are just the tip of the iceberg. Adobe has a great potential to capture a sizable market in the online office segment. With their AIR platform, Adobe can also offer desktop clients for their online office apps.
• Yahoo is not a player yet in this space. Their recent acquisition of Zimbra and the rumors about possible acquisition of Zoho (a claim about which Zoho didn’t want to comment at this time). If Yahoo also positions itself into this game, it will make the race to capture web office market an interesting one.

Apart from these big companies, there are many smaller companies vying for a piece of the pie. Zoho, with its impressive array of applications, leads the smaller companies and it could also be a potential acquisition target for Yahoo if they are serious about moving into this space. Even otherwise, Zoho has a great opportunity among the non US crowd. Especially, the new users from Asian countries. Thinkfree is another company that has made an impact in this space. Glidewrite, ajaxWrite, etc. are also pushing themselves in this space with their own unique offerings.

What can we make out of this chaotic market space? We can be sure of one thing. Online office is the future of Work 2.0. The days of Microsoft Office software, in its current form, are numbered. Unlike the traditional software world, no single player can maintain the monopoly in the market. This will push the envelope of innovation and the consumers will ultimately benefit.

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