"Many barriers continue to make it difficult for Office alternatives, such as the need to work with third-party products and legacy content in Office formats, to user acceptance and privacy issues for cloud apps," said Forrester analyst Sheri McLeish.
Microsoft's web-based competitors lack depth of functionality and cannot always ensure easy roundtrip conversion between formatted Office documents and their own tools, McLeish believes.
"Even if you want to use an Office alternative, many companies collaborate with partners or work with clients who use Office and need to stay in synch with them," she said.
"Google seems to recognise this dilemma and has been looking to change the game by becoming more interoperable with Office as well as by building its own software-as-a-service-based ecosystem with Google Apps Marketplace, where all the apps work with Google Apps."
IDC analyst David Bradshaw said that Google is making inroads into the market, but that it will be hard for the firm to ever really the challenge the dominance of Office. "Even OpenOffice can't displace it," he said.
Bradshaw explained that the area where Google has a stronger offering than Microsoft is in how it allows users to share documents.
"Google allows multiple users to work on a document, but Microsoft Office online only lets two people work on a document at the same time," he said.
Bradshaw added that he had made the switch from Microsoft Office to Google Apps because a project he is working on for the European Union requires all participants to work on the documents at the same time.
However, a V3.co.uk sneak preview of OWA shows that Microsoft is increasing the document sharing capabilities in Office.
Collaborative editing will be supported by some applications in OWA. Spreadsheets can be opened by more than one person using the Excel Web App, while OneNote documents can be edited by several users using the browser or rich client.
Still, Bradshaw added that organisations wanting a light email client tend to opt for the Google Apps suite over Microsoft.
"If an organisation has a large number of users that just want to look at things now and then from beyond the firewall, paying a licence fee for Microsoft Office makes less sense," he argued.
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