Office Live Workspace -- does it work for you?

Microsoft is losing the battle for the Web-based software-as-a-service marketplace simply because it hasn't showed up. But that doesn't mean it should get any sympathy points when it finally does show up, if all it brings with it is Office Live Workspace.

If you're like me you've been waiting for the world's No. 1 word-processing productivity suite maker to go competitive on the likes of Google Docs and Adobe Buzzword and Zoho and many more. Maybe you thought with all the announcements last week -- expanded efforts on hosted Exchange and Sharepoint services for larger businesses, and a new beta of Office Live Workspace for very small businesses -- the software giant is finally making its move.

No such luck.

The hosted services may be great, but they don't really apply. They merely represent the captive's dilemma -- buy or rent? It may encourage some slightly smaller customers to sign up for Exchange and Sharepoint by lifting the administrative collar of actually running the servers from their necks, but either way they're Microsoft customers signing Microsoft licensing agreements.

Office Live Workspace, on the other hand, looks like more of a direct response to Google and Adobe and the others. But unfortunately it's not. While Workspace promises to do something on the Web, it doesn't. Instead, it ties you more firmly to Office on your desktop.

The heart of this supposedly Web-based service is more software you install on your PC -- an add-in for Office that lets you share 500MB of server-based storage for Office documents with whoever you choose. Around this Microsoft has wrapped a Web site that lets you administer the workspaces and groups you create, build simple lists of projects and tasks and annotate them with status and comments.

What little it does it does well. In what amounts to a major admission from Microsoft that it is not the center of the universe, Workspace will work in Firefox as well as Internet Explorer. It works in Firefox on the Mac, too -- but not in Safari.

Officially it is not supported on Linux (are you surprised?) but in fact I could log and see my Workspace workspace in Firefox on a Linux machine and even download files to edit, but I couldn't upload files back to Workspace. The Office add-in, of course, works only with Office, not with OpenOffice.org or Lotus Symphony.

That is, if you can get into Workspace at all. It may just be a beta thing, but if you also have an Office Live Small Business account, the Windows Live login sequence seems to send you there instead, and it can be a struggle to get where you want to go.

The real problem with Workspace isn't what it does, but the larger issue of what Microsoft isn't doing on the Web. The software giant is in a mind-trap of its own making: long term, applications like Office will become Web services, but Microsoft won't be competitive because short term it can't bring itself to do anything that might cannibalize even a single dollar of its considerable revenues from Office.

So it leaves the field to Google, which is merrily behaving like a drug dealer in a schoolyard, handing out free samples of the future in Gmail and Google Docs -- and building itself into the way people use their computers and the Web.

If Microsoft is planning to add Web-based Word and Excel to Office Live Workspace when the time is right, it should consider doing it quickly. And while it's at it, it should take a look at stealing the interface from Adobe's Buzzzword Web-based word processor. That's what I'm using to write this, and it's really good.