Google's DocVerse Acquisition Puts Microsoft on Defense

(MoneyWatch)  Rumors had been bouncing around since last December that Google (GOOG) would acquire DocVerse, a tool which lets people collaborate online using Microsoft Office documents. Now the rumor is official, and the panic at Microsoft (MSFT) is already evident.

Microsoft is on an uncharacteristic early release path with Office 2010, making it available a month early. Why? Because the company has no choice. CEO Steve Ballmer has made it clear that Microsoft sees its future in cloud computing:

He called the cloud--which I take to mean the modern Internet ecosystem--"the gift that will keep on giving." He also emphasized, "The inspiration for what we're doing now starts with the cloud. Windows Azure and SQL Azure start with the cloud as their design point--This is the bet, if you will, for our company." He laid out pretty much the company's entire strategy in terms of the cloud--in mobile, search, entertainment, devices, professional software, servers, and social networking.

Bet the company is exactly what Ballmer has to do, and exactly what Bill Gates failed to realize in the 1990s. However, as Microsoft moves toward the web, it enters Google's back yard -- and Google has been busy attending to its garden. Google Apps have gained some market share and a reputation for making online collaboration possible in a way that Microsoft hasn't offered. Adding DocVerse means that Google can bring people into a web-based environment with Office files even before Microsoft does, at least without a lot of administrative bother.

Google has said it doesn't yet know how quickly it can integrate the DocVerse offerings into Google Apps, but the clock has started. Microsoft has been facing the distinct possibility of playing catch-up with its own products in the very area -- cloud computing -- that it sees as a path out of the corner it currently inhabits. That's why Ballmer pushed hard to get software out the door early. There's no other choice.

Hammer image, RGBStock.com user johnnyberg, site standard license. Photo manipulation, Erik Sherman.