"I've expected that the new Office would support true, seamless file synchronization across mobile and desktop environments," said Brad Shimmin, an analyst with CurrentAnalysis. "Such capability will be required, frankly, if Microsoft is to compete with Google over the long term... It is paramount for productivity vendors like Google and Microsoft to provide a seamless working environment between desktop, laptop, tablet and mobile phone."
Shimmin said Microsoft has to step it up because Google, its biggest competitor, is making inroads in the cloud-based Office app space.
"In short, Google has aggressive pricing, rapid innovation, simplified management, adequate security and governance, and strong ties between consumer and professional technologies and applications," Shimmin said. "I don't believe this [Office update] will bring Microsoft on par with Google in terms of capability and appeal within Google's existing customer base."
According to a May report from research firm Gartner, Google is far outpacing Microsoft in the cloud business. Compared with Microsoft, Google is winning one-third to one-half of new, paid-for, cloud-based office system seats, the analyst firm reported.
"Google's call to action is appealing to organizations generally not pleased with their current situation," Gartner noted. "Primarily, the disaffected are moving to Google Apps, legitimizing that choice, and helping Google grow its base and defy all the early predictions of Google's defeat."
Melissa Webster, an analyst with IDC, said a lot of aspects of Microsoft's cloud-based approach need improving if the company is going to compete more aggressively against Google.
"The cloud is new for Microsoft, and there have been ease-of-deployment, ease-of-migration and some ease-of-use issues, though these are all getting attention," Webster said. "Microsoft needs to continue to innovate, but not just to compete with Google. It needs its customers to upgrade to new versions for pay."
Microsoft, despite its upgrades and focus on the cloud, still will have a tough fight on its hands if it wants to best Google.
"What Google is doing better than anyone is integrating all the applications and services they offer into one relatively inexpensive solution that is easy to use and seamlessly maintained," McGregor said. "As the Google applications mature and become more competitive with other standard applications, all the Google cloud applications will pose a greater threat to Microsoft."