7/2/2009 -- Networking giant Cisco Systems on Tuesday showed an interest in the hosted productivity suite space that Microsoft is poised to dominate.

In an online press conference, a Cisco executive announced that the company is "thinking about" adding a service that would allow users to create Office-like documents that could be shared online. The new service would be part of Cisco's WebEx suite, according to Doug Dennerline, senior vice president and manager of Cisco's Web services.

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Microsoft first disclosed an online version of its Office applications at its Professional Developers Conference late last year. These "Office Web applications" will be part of Microsoft Office 2010, which is expected to be released in the first half of next year.

Many other companies already provide hosted business productivity applications.

Google provides a free and subscription-based Web service called Google Apps. IBM provides its Lotus Symphony productivity suite for free, as well as a hosted service called Lotus Live, which was unveiled in January. Last week, software-as-a-service provider Zoho introduced Zoho Office for Microsoft SharePoint, which is a hosted Office-like suite that integrates with Microsoft's collaboration and document sharing application.

Many free Office-like offerings have been gaining popularity in the consumer segment but they have lacked widespread enterprise adoption. Cisco's presence could change that dynamic.

"I think Cisco has an advantage over these other competitors because it's got a long history of selling to the enterprise," said Matt Rosoff, research vice president at Directions on Microsoft, in an e-mail. "It might be easier for Cisco to sell Office-like features added on to WebEx than it would be for Google to come in with a brand new pitch encompassing hosted e-mail and collaboration."

Historically, Microsoft has dominated the installed business productivity suite market with Office. Last year, it rolled out Microsoft Office Live Workspace, which provides space in the Internet cloud for sharing documents created using installed versions of Microsoft Office. The next development to watch will be Microsoft's Web-based Office add-ons, which are expected to appear in Office 2010, according to Rosoff.

"From what we're hearing so far, there will be lightweight versions of key Office apps like Word and Excel," Rosoff explained. "They will most likely have limited feature sets, available through a browser. Consumers might get access to these apps for free, while enterprises might have to have Office licenses to use them."

Cisco has expanded from its traditional networking portfolio and recently added servers to its line of products. In 2007, Cisco acquired WebEx, an online Web meeting product. Last year, the company acquired PostPath and its e-mail technology, as well as Jabber for IM and presence.

"Cisco is taking an aggressive position in this social-media collaboration space," said David Mario Smith, senior research analyst at Gartner. "This online media conference was really an effort to show that they are on top of this next generation of communications, and they are a viable source in that market as compared to Microsoft and IBM." --Herb Torrens