MS to Fight Google Apps with Web-Streamed Office

It was only February when Microsoft had a big issue with Fasthosts providing a streamed version of Office, but it seems their tone has softened.

Worried by the small but growing number of small businesses and consumers switching from Microsoft Office to cheaper or free online alternatives such as Google Apps, Microsoft Corp. plans to arm a key cohort of its formidable legion of partners to help fight the threat to Office 2.0.

Microsoft plans to test a yearlong change to a key part of its license for Office 2007 that will, according to multiple sources, enable Web hosting service providers to offer Microsoft Office via an emerging technology called application streaming.

The sources said Microsoft will make the announcement early next week during its weeklong Microsoft Management Summit show in Las Vegas.

You'll recall that Microsoft recently announced a beta version of a subscription model for Office called "Albany," which bundles Office with other apps, including Windows Live OneCare.