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Google's new, web-based Spreadsheet is being viewed as a major challenge to Microsoft's Excel and the dominance of its Office suite. From my perspective, it is also a significant endorsement and will be another catalyst in the movement toward Software-as-a-Service (SaaS).

Google's move isn't a big surprise to anyone who follows the software industry and the escalating tensions between Google and Microsoft. But, it is still a milestone in the evolution of SaaS.

While the number of web-based alternatives to Microsoft Word, Excel, Powerpoint and Project has grown--check out THINKstrategies' SaaS Showplace for some examples--none had gained mass market attention and acceptance. Instead, they've been the playthings of Marc Benioff of Salesforce.com and techies who love to imagine a world without Microsoft.

Google's Spreadsheet has made news in the popular and business press, elevating the stature of SaaS and giving it greater credibility across a larger cross-section of potential customers, including corporate executives.

This will accelerate Microsoft's SaaS development and acquisition efforts. (See my previous blog.) It will also fuel a surge in venture funding of nascent SaaS developers, and intensify the efforts of eBay, Yahoo, AOL and other Internet companies seeking to position themselves as SaaS providers.

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