Microsoft's new Office product to compete for free with Google Docs

Sometime in 2010. In fact, the software giant has announced that three separate versions of the next Office product suite will be web-only. There will, of course, still be PC-based versions of the software, but the deal is this: Microsoft and Google are firing one salvo after another at each other.

Microsoft released the Bing "decision engine" in June to up the search advertising game with Google. Google then announced to the world that it would have a free operating system (Chrome) to "compete" with Microsoft's Windows when it's released in late 2010. The "compete" part is a little cloudy, but still important right now.

Microsoft's latest admission that it must support the Office software suite to being web-available says that the web has finally arrived for the company. The computing world around it is changing from one of being based on a PC's hard drive to one that's based on a web browser. At that point, does anyone care what operating system a PC uses?

That's a paradigm shift, and it's one Google is leading with its large pockets. The trick for Microsoft is to find the right price point to offer its web-based Office suite, or give it away for free like Google does -- at least, for the consumer customer. For businesses, the Office web product will have a cost; Google will still give Google Docs away for free. The plot will thicken.