The value proposition of Microsoft’s potential approach is very tempting: Why settle for some low- or no-cost AJAX (Asynchronous JavaScript and XML) application when you can get Microsoft's latest and greatest delivered right to your desktop for the same money (or for a few dollars more, depending on how aggressive Microsoft decides to be with its subscriptions push)? That would be a steep challenge for Google to meet.

Gauging Google’s chances
Even if Microsoft never delivers Office as thin client services à la Google Apps, Google is not home-free. It still needs to professionalize its applications quickly and jumpstart its own thin client ecosystem and partnerships. And those necessary efforts notwithstanding, Google’s success or failure may ultimately have more to do with Microsoft’s own gaffes and fumbles.

One Microsoft error is clear: the unenthusiastic reception for Vista and Office 2007. Both make IT work harder, suffer from design and stability drawbacks, and deliver less than originally promised. Only by virtue of a gargantuan installed base can Microsoft weather that grudging transition.

A more critical Microsoft mistake, perhaps, is the company’s paranoid campaign to stamp out piracy. Microsoft has made the prospect of living with Windows increasingly difficult to stomach. Case in point: WGA (Windows Genuine Advantage). With WGA, Microsoft has made the process of activating and maintaining the activated status of its products so cumbersome and error-prone that it’s becoming an obstacle to future adoption. Horror stories abound of users whose systems became disabled because WGA was triggered erroneously, resulting in reduced functionality or, as in my own case, a complete lockout from my desktop.

Another potential chink in the Windows armor involves virtualization. Microsoft could leverage its SoftGrid application virtualization and streaming technology to deliver fully functional versions of its most popular applications via a monthly or quarterly subscription model. If it actually delivers on this approach, Microsoft would validate the cloud approach to application delivery, helping make the case for thin client competitors such as Google. Then Microsoft has to win by being better and/or cheaper than Google. Its history argues against either outcome, at least at first.

If Microsoft comes out with an aggressive fee schedule for a streamed version of Office, the game could be over for Google. But if Microsoft gets greedy and decides to protect its existing channels by withholding any clear financial incentive to subscribe, customers will likely balk at the “virtual Office” solution and start to actively consider alternatives such as Google Apps.

Without question, Google can put a serious dent in Microsoft’s dominance and in the traditional fat client computing model if it shores up its current offerings, if it builds an effective, incentive-driven ISV community, if Microsoft continues to foist more draconian restrictions and hurdles to product activation, and if Redmond fails to aggressively push its upcoming subscription offering in terms of functionality and price.

That’s a lot of ifs, and only two are within Google’s control. IT shops may want to hedge their bets by at least testing the Office Live waters along with Google Gears. As much as pundits get excited about revolutionary, “New Economy”-style change, the world of IT and users is more pragmatic and cautious. After all, not everyone wants a revolution. Some of us just want to feel like we’re part of one while we watch it all unfold from the comfort of our own familiar PCs.