It’s interesting that today, as many have predicted, Microsoft announced that the online software model will be pushed by the company. It’s a massive response and acceptance of the immense power of Google’s online-based email tools and its most recent embrace of Sun’s OpenOffice. In plainer language, Google wants to make PC-based Microsoft Word server-based Net Office. As long as I can remember, Sun has promoted the idea that the “network is the computer” and there are many, many unparalled features (like online collaboration and real-time version tracking) that only network-based applications can handle. Sun, in partnership with Google, could ultimately win the office productivity and workflow market if there is a serious desire for users to go ahead with online apps.
Despite many open source arguments for online application development and marketing, I have serious reservations about both the model and the privacy aspects of this purportedly new approach. There are a few very good and very serious online applications (like 37 signals’ excellent Basecamp, which I use daily) that provide a very solid and responsive application environment for simple tasks such as ordering and maintaining lists and messages and documents. The speed of these apps are fast, almost approaching the speed of a PC-based text editor or Word processor. The brief delay in responsiveness because of the network is a small price to pay for the collective nature of these applications.
But if, suddently, Google allowed me to transfer all of my Word documents to an online Word-like repository that could archive, search, and recognize my documents, would I step up and sign up? No. There are two key issues of trust that I could not readily accept:

1. What will Google do with the content of my documents sitting on their servers? What are the real legal responsibilities that Google has toward me and my business documents? What legal repercussions are in place if, for example, they decide to share even aggregate data about my archive? And what would happen if someone at Google or a smart hacker could suddenly access my business, personal or other agreements, proposals, and personal information?
2. As worrisome, what happens if Google shuts down? If Larry Page and Sergey Brin get the avian flu one day and the company shuts its doors, do I lose all of my documents and my business flies away the day after? And what happens if, for whatever reason, Google’s (albeit superbly redundant and stress-tested) servers go down? Will they assure me that I can get my documents back in an hour, a day or a week? And, most apocalyptically, what happens if the whole Net goes down? Granted, as a Web designer, I’m out of business anyway. But what about my mom’s documents?

[Google’s Gmail (email) is an exception rather than the rule here. Gmail, which is a powerful and highly usable online application, can also be used on the desktop by programs like Microsoft Outlook. And Gmail, despite its cool factor, has raised numerous legal questions about the privacy of content stored.]
I think it’s wise for all of us, if, in the long run, Google and Microsoft battle it out in the online application arena. It will mean better overall application development, stronger user interfaces, and more thoughtful engagements with customers. But, unless Google and Microsoft have a way to create real-time syncrhonicity between desktops, networks and server clusters, I doubt the real prospects of massive migration to online apps. This means, by the way, that Bill Gates’ vision of an Office on every PC is the long-term winner.