Office Web Apps will not include all of Office's features, like the ability to create macros. Further, Office Web Apps will remain in beta after Office 2010 launches.

Microsoft clearly faces pressure from free Web apps that offer similar functions to many of its Office programs, although so far, increased use of services like Google Docs hasn't been matched by a drop in the use of Microsoft Office, says IDC analyst Melissa Webster. In its September 2009 study, IDC found that Office is widely used in 97 percent of companies surveyed, "and the needle on that has not moved in three years," according to Webster, who says most companies use Google Docs to complement Office. "If you're in a large organization, you're running this huge number of enterprise applications," she says. "You're stuck with selectively implementing things in the cloud."

Organizational psychology may also help Microsoft. "What works for Microsoft is human behavior; we really don't like change," says Rob Enderle, principal analyst at the Enderle Group.

Office Web Apps will also offer Microsoft a chance to assess the logistics of offering other software over the Web. DelBene was says cloud computing is creating a "total transformation" in Microsoft's business model.

One Microsoft rival agrees that the company is wise to take a measured approach. "It would be a mistake for Microsoft to put it all in the cloud right now," said Raju Vegesna, who works for Zoho as an "evangelist." Zoho has only one customer with more than 10,000 users, and that customer uses a special, client-based version of Zoho's applications. Still, Vegesna says, Office Web Apps provides validation for cloud applications, and he says that Zoho expects to see a substantial jump in users this year.