Google believes the Web is the future and it's inevitable that document creation, publishing, and collaboration will move online. If you agree with that vision, then an online productivity software offering from a company as prominent as Google will naturally be attractive to you. Just realize that Google's vision is also self-serving: Its core business is search, so it prefers your documents to be online, regardless of whether that's really an advantage.
Zoho's is more of a pure SaaS play, in which the whole may be more important than the quality of its parts. In other words, although Zoho's broad suite of Web-based apps may not give you everything you can get with desktop software, it might be enough. More important, its pricing structure and the fact that SaaS eliminates the need for in-house IT staff may be appealing enough to small businesses on tight budgets that they'll be willing to forgo some of the capabilities of more traditional applications.
Microsoft, on the other hand, is undoubtedly moving to the Web as a defensive measure, but its goal is not to replace the Office we have now. Rather, it plans to augment its current offering with an online option. In that sense, the Office Web Apps will probably fill much the same niche as Outlook Web Access: They'll be invaluable for mobile workers, but where possible, most will stick with the desktop versions. In addition, by bringing support for the Microsoft Office file formats to the Web, Microsoft further cements its status as the de facto standard for office documents.
I suspect Microsoft's model will resonate best with most customers. Don't be surprised if you find yourself using Web-based productivity software in the near future; the online publishing and collaboration features are too valuable to ignore. At the same time, don't wipe your current office suite from your hard drive just yet. Although the current offerings are impressive, browser-based apps have a long way to go before they become the standard for business users.
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