Microsoft officially launched Office 365 today, the online version of its popular productivity software—Word, Excel, Outlook and other applications—used by millions of computer workers worldwide.

The Office 365 suite of applications, which has been under beta test since October, is designed to let workers in small- to medium-size businesses collaborate on documents, spreadsheets, and other workplace files using high-speed Web connections. By moving such capabilities online—to the "cloud"—businesses could see dramatic cost savings. Instead of the hundreds of dollars spent on software programs for each work computer, Office 365 monthly subscription fees start at just $2 per user. Cost savings could also be seen in workplace technical support, since the software is maintained and upgraded on Microsoft's servers and not on individual computers.

Significantly, Microsoft's cloud-computing effort is seen by the industry and computer users as an aggressive move against other cloud companies, including Google, which has been offering its Google Apps cloud-based productivity software for years. Already, the search-engine giant has rallied its Google Apps fans for support. Prior to Microsoft's announcement, Google Apps product manager Shan Sinha posted on Google's official blog a kickoff to find "365 reasons to consider Google Apps." Among the top four arguments in his post:

Office 365 is optimized for Windows-based PCs and devices, which reduces your flexibility. Our applications are designed to work well on any device, on any operating system... When the web is the platform, it just works.

Although both Microsoft Office 365 and Google Apps are designed for the workplace, individuals can try out the cloud-based suites for free for 30 days.

Microsoft Launches Office 365 [Microsoft]
Microsoft launches Web-based Office, rivals Google [Associated Press via Yahoo!]
Microsoft takes Office into the 'cloud' [AFP via Google News]
Microsoft Office 365 Could Put Google Apps Back On The Defensive [San Francisco Chronicle]
4 Reasons Google Apps Beats Office 365 [Information Week]
365 reasons to consider Google Apps [Official Google Enterprise Blog]