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  *  

  Microsoft will face online fight on core software
Time: 00:15 EST/05:15 GMT | News Source: *Linked Within Post* | Posted By: Kenneth van Surksum

The co-founder of Hotmail, the web-based e-mail service bought by Microsoft for $400 million a decade ago, is challenging the American software giant’s core $20 billion (£9.7 billion) office desktop business.

Yesterday Sabeer Bhatia released a free online rival to the bestselling Office suite of applications that will allow users to view, share and edit documents from any computer.

The Indian-born Stanford graduate said that Live Documents would pose a “significant” challenge to Microsoft’s propriety software business, which eventually would be made redundant by the evolving internet applications industry. Office, bundling the Word word-processing, Excel spreadsheet and PowerPoint presentation tools, accounted for a third of Microsoft’s total revenues last year. It is forecast to top $20 billion this year.

“We are just a few years away from the end of the shrink-wrapped software business. By 2010, people will not be buying software,” Mr Bhatia said. “This is a significant challenge to a proportion of Microsoft’s revenues.”

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