The big Techmeme story of the day is that 73% of Americans haven't even heard of online office alternatives. To quote Duncan Riley of TechCrunch...
Google and others are working hard to change the way businesses use basic services such as wordprocessing with a continued marketing push into the enterprise sector. The challenge is to overcome over 25+ years of what people consider to be normal (desktop apps) by proving that the online alternative is ready and capable of being used. There’s little doubt today, at least based on OS X and Linux adoption figures that there is a very real and definite move away from Microsoft, accelerated by the disaster that is Vista. Whilst there are always desktop alternatives on both platforms, there will be a continuing number of users who question the need to buy Microsoft Office, be that as an upgrade for an existing OS, or brand new as they switch to Mac. It’s a slow switch, but given the online alternatives there is little doubt that the number making the switch to online apps will continue to grow.
I think there is a lot of truth to the above statement but the one thing I would add is that I think the real disaster Microsoft is going to face (in this arena) isn't Vista its Office 2007.
Office 2007 is deceptive because its received fairly positive reviews from the type of people who review things for a living. But as someone who has done usability testing with actual users I can say it was nothing short of a disaster. The new UI essentially makes the suite a new program so what you get is either users digging through tabs trying desperately to find the command they need or users trying repeatedly to use shortcuts that no longer work. All the time what they are really trying to do is unlearn over a decade worth of previously gained knowledge of Office. It wasn't a pretty sight and when people go to upgrade I think they'll find they're essentially choosing from two all new solutions. One of which is free.
Again, not good for Microsoft.
That said, until the online office crowd wises up and makes some kind of solution like Google's Search Appliance for these suites I don't think they'll get much traction in the enterprise. No serious enterprise is going to put all their data on Google's servers given the lack of guarantees that Google offers up in regards to that data.