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It is no secret that Microsoft makes its fortunes in packaged software on CDs.  Pop in almost any store and you’ll see 1,323 varieties of Vista neatly packaged, waiting for you (OK, that number may not be accurate).  Unveiling plans yesterday, Microsoft announced a strategy that will put them in the hunt for users of online applications in the second half of 2008.

Microsoft is making this move to get into smaller and medium sized business who are choosing to go with Google’s offerings.  Google says they have upwards of 500,000 businesses signed up for their service and growing everyday.  No one seems to be expecting an all out war just yet, as Microsoft has too much too lose.

For sure, Microsoft is wading slowly into Google’s pool, likely figuring that every online customer is one less package they don’t sell.  Will Microsoft find success built on their desktop app dominance?  Anyone remember the Lotus suite?

Read [VentureBeat]