As we all know, Google Docs has slowly but surely been advancing on Microsoft’s territory and is improving their service over time. Although currently they do not offer the specificity nor quality that the Office Suite does, they are making gains each day and the features that continue to be added are directly linkable to the Office Suite (see article here about new features).

Further, the market has also been producing a wider variety of small startups that are attacking separate portions of the Office Suite and are making gains in their own right. For instance, SlideRocket (article here) has raised a decent amount of funding and has built a viable PowerPoint platform application that really seems to be solid. As more and more of these smaller startups get funding and attack different portions of the desktop application market, we’ll being to see a huge shift in a positive direction.

Granted, most of these smaller startups still have to build a user-base and really prove that their product can offer the same functionality and service as the desktop application they are attempting to replace. However, (queue 800lb gorilla) Adobe released their online version of Photoshop (WSJ article here) , firmly drawing lines in the sand for the battle that will soon ensue. Photoshop, which typically runs about $650 has a huge user-base and with Adobe’s offering of a light version, they are firmly entrenched in the race.

As more major companies begin to expand and offer their services free, or close to it, on web platforms, we’re going to see a major market move and likely some consolidation once the technologies are established. Either way, it should be a great thing for consumers and will continue to provide great investment opportunities for VCs.

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