Entrepreneur Sabeer Bhatia, a co-founder of Hotmail, has announced that Instant Collaboration Software Technologies (InstaColl), a Bangalore company which he co-founded, launched Live Documents, an online service which provides similar functionality to that of Microsoft Office.

The Flash-based applications suite viewed via an Internet browser is just one of the means to use Live Documents. The product can also integrate within your existing Microsoft Office installation, adding online collaboration capabilities.

"We are just a few years away from the end of the shrink-wrapped software business. By 2010, people will not be buying software. This is a significant challenge to a proportion of Microsoft’s revenues," Bhatia said.

Apparently, Bhatia's suite is somewhere in between Microsoft's desktop-based suite and Google's online suite. "Even power-users of Microsoft Office can use our service," Bhatia said.

"From a technology and utility perspective, Live Documents offers two valuable improvements - firstly, it break's Microsoft's proprietary format lock-in and builds a bridge with other document standards such as Open Office and secondly, our solution matches features found only in the latest version of Office (Office 2007) such as macros, table styles and databar conditional formatting in Excel 2007 and live preview of changes in PowerPoint 2007. Thus, Live Documents lets consumers and businesses to derive the benefits of Office 2007 without having to upgrade," said Adarsh Kini, Chief Technology Officer at InstaColl.

However, Zoho, a similar suite, also has their own plugins for the desktop Office. Google will not wait for long before launching their own stuff. It's hard to say how this competition will turn out, but it's quite certain that the way users handle documents will soon change. In the end, the users are always better off when there are different solutions battling it out for their money.

Sabeer Bhatia, a Stanford graduate, joined Apple where he met Jack Smith. The two colleagues came up with the concept of a web-based database entitled Javasoft. Eventually, they decided to create HoTMaiL (the uppercase letters spelling out HTML - the language used to write the base of a webpage). The service was launched on July 4, 1996 and in less than six months, the website attracted over 1 million subscribers. Hotmail was sold to Microsoft in 1997 for a reported sum of $400 million.