Despite the fact that Microsoft has competing products of its own, some influential folks within the company have seen some merits of "Open Web" technology that's a standard part of browsers.
The interesting case in point is Microsoft Office 14, the upcoming version of one of the company's core products and profit engines. The software, due in beta form in 2009, is of Microsoft's highest-profile efforts to bring its desktop software power to the Web.
"The fundamental premise for Web apps is you want to be able to get at your Web apps no matter where you are," Capossela said in an interview.
Though Microsoft has expressed confidence Silverlight will spread broadly--by luring people to install Silverlight to watch the Olympics online for example--it's far from ubiquitous today. And Microsoft wants people to be able to use Office 14 online not just from their own computers, but also from friends' machines or airport kiosks where people don't have administrative privileges to install software, Capossela said.
Silverlight will improve the online Office 14 interface when installed, though Capossela wouldn't share details of how beyond an earlier demonstration of zooming a document to high magnification. But, he argued, Microsoft doesn't have to reproduce all the features of ordinary Word, Excel, PowerPoint, and OneNote in its online incarnations.
"You're probably not going to work for three hours straight in a browser, but you're going to want to do some lightweight work no matter what machine you have," he said. And if you're editing documents on your own computer, "We already have something on your machine. It's called Office. It defeats the purpose of doing productivity in the browser."
The view sheds some light on the balance Microsoft hopes to strike between the regular and Web versions of Office. Although the Web version of Office will be available for free in ad-supported form and in a licensed or hosted form for companies willing to pay, the company obviously still considers the PC-based version of Office the cornerstone of the business.
Google, on the other hand, which has no desktop software cash cow either to protect or benefit from, has every incentive to make Google Docs as powerful as possible.
"We can make a very good experience in the browser and we don't have to compete with the rich-client experience we have today," Capossela said.
Done right, online Office could help cement Microsoft's power as cloud computing arrives, bringing advantages such as the ability to let multiple people simultaneously edit the same document. Done wrong, it could yield power to Google as it seeks to expand its search power into other domains.
But though Microsoft may not be the first to the cloud with online productivity tools, don't expect it to be complacent. The Office business successfully navigated the transition from software running on isolated PCs to software that relies on a server for e-mail access or collaboration, Capossela said, and the company is paying close attention to the cloud transition.
"The use of these Web apps today is incredibly small," Capossela said. However, "we always feel ultraparanoid about missing out on something."