Google is putting finishing touches on the integration of Docs & Spreadsheets with Google Apps for Your Domain -- another step in its strategy to build a suite of hosted applications for organizations.

The introduction of the new version of Google Apps for Your Domain including Docs & Spreadsheets will happen this quarter, and it could come as early as next week, several people familiar with the company's plans said.

It has been widely assumed that at some point Google would add Docs & Spreadsheets, a word processing and a spreadsheet program, to Google Apps, a suite of communication services for organizations. Docs & Spreadsheets lets multiple users share files and collaborate on them.

Google Apps provides white-label versions of several Google communication services, including the Gmail Web mail service, the Talk instant message and voice chat service and the Calendar online scheduling service. Organizations can provide these services with their own Internet domain and branding to their users.

Arizona State University, which launched Google Apps in October for its students, would be very interested in having Docs & Spreadsheets as part of the suite, said Kari Barlow, assistant vice president of the university's technology office. "Where the strength is with Docs & Spreadsheets is in the ability to synchronously collaborate on documents," Barlow said. Groups of students could use it to collaborate on class projects, she said.

"Google Apps has been highly successful for us. We're looking at extending the environment and implementing new technologies as they are released to us. It'll be interesting to see when Docs & Spreadsheets comes out, how that will impact the environment," Barlow said.

Not everyone sees a use for the Docs & Spreadsheets integration, however. San Jose City College is delighted with Google Apps, which it adopted mostly to provide e-mail accounts to its students, but doesn't see a clear need to offer them hosted word processing and spreadsheet software at this time, said Michael John Renzi, the college's director of finance and administration. However, the college would like the suite to have a course management application, he said.

Google Apps is free but Google plans to introduce a more sophisticated, fee-based version for large organizations.

Google Apps and Docs & Spreadsheets have been parallel projects in Google's attempt to enter the hosted applications market and expand beyond its core search engine business. Many see Google gearing up to compete against Microsoft's PC-based Office applications suite.

Proponents of hosted applications say they are more convenient than the PC-based, packaged software upon which Microsoft has built its empire. Hosted applications are housed in vendor servers, freeing customers' IT departments from installation and maintenance work, and from having to purchase extra hardware and storage, proponents say. However, the consensus currently is that hosted applications suites don't come close to offering the breadth of features that Microsoft Office has.

Google has other hosted applications for organizations, including Google Analytics, a hosted service for tracking Web site usage and traffic. The company also has a wiki platform that it acquired when it bought JotSpot Inc. last year. It has been rumored that Google is developing a presentations application.

Google declined to comment for this story.