Panic Button in Redmond
If the announcement of a collaboration between Sun and Google doesn't set off alarm bells at Microsoft, then nothing will. Even the fact that some states have chosen to use Open Office shouldn't necessarily toll the bell of doom for Microsoft since they indeed still have many, many office users. However, they have taken way too long to bring more web based features of Office for free, largely because of their forced concern over the security holes in Windows XP.
The truth of the situation is that Microsoft has taken its customers for granted. They have felt that since they own the way that companies store and access their data, they could dictate how they used that data. Microsoft decided that integrating their office suite with rich web services wasn't something that their customer base wanted. They were wrong.
Now, that isn't to say that everyone everywhere will just stop working on spreadsheets and word processing documents online immediately. They won't. Sun's CEO was right in that customers want more services and less software. Still, there are those who won't feel comfortable with Google storing or having access to their powerpoint financial statment due to go out to their customers while they are working on it. Nor will many businesses truly want to work on their sensitive data online. Google and Sun will release a version of Star Office that will be for corporate users who want secure internal collaboration. They will bundle it with a new version of the Google search appliance. This could definately be an Exchange killer.
I had thought for a while that Google was going to bring it to Redmond in a way that would make everyone go Ooooh. But never before has Google's intentions been clearer. They want to push Microsoft to the periphery to make the environment better for innovation in computing. They were very conscious about how they worded things in the press release and they are being very careful not to tip their hands, but it was interesting that Google's stock price dipped slightly after the announcement. It would seem that at least a few of Google's shareholders aren't too convinced about them taking Microsoft head on. I for one think that they have to do it, because they are the only ones who can do it. If the end result is only that we end up with a better Microsoft and a better Google, then the consumers still win.