A lot of people like to compare Google Docs & Spreadsheets with Microsoft Office, OpenOffice, and other office suites, and to say that Google's product is less powerful and can't be a threat for Microsoft. But this comparison is plain wrong.
Here's an excerpt from a 2005 press release of Writely, that was bought by Google in 2006 and became the Docs part of Google Docs & Spreadsheets:
While Salesforce.com's Marc Benioff and others have hailed Writely as a serious challenge to Microsoft and its dominance of the office productivity market, Writely is not a carbon-copy of existing desktop solutions. Rather, Writely is an innovative, Web-centric word processor that leverages the connected nature of the Internet to provide online storage, editing, sharing and communication of documents - documents that users can now upload and save in multiple formats.
In a post from 2005, Writely argued that web applications have the advantage of being more approachable. They don't require software installation, reading manuals.
One of the reasons the web is so nice is that the page UI is simple...a few things at a time, a very easy metaphor, etc. It passes the "mom" test - I can usually just tell my mom to go to a site, and she usually can figure it out. I can't remember the last time I could do that with a desktop app. So, even though the windows desktop is "richer", it's not necessarily better.
And because they wanted to build something new, they ignored the obvious approach of trying to copy Microsoft Office. Writely tried to add features that make sense on the web.
The other question I get asked a lot is related - "So, how much of Word are you planning to copy?" The answer is: "none of it". We don't think of ourselves as a copy of Word on the web. (...) We're a word processor, re-invented for the web.
Writely stayed away as much as possible from copying Word, and admired Gmail's success, that didn't copy any desktop mail client, unlike Oddpast, which was released much earlier than Gmail. Oddpost was bought by Yahoo, that transformed it into the new version of Yahoo Mail.
What's the difference between Oddpost and Gmail? One followed desktop interaction conventions, required a particular browser and a particular operating system, and gained a cult following. The other came along four years later, followed Web interaction conventions, worked across all modern browsers — and transformed its entire category. Some might argue that Oddpost is the more sophisticated solution. But Gmail is part of the larger Web in a way that Oddpost never could have been.
This philosophy transferred to Google Docs & Spreadsheets, so that's why it's unfair to compare it to Microsoft Office. Even if they'll add more features (charts in Google Spreadsheets, pagination in Google Docs), the products won't try to be an imitation of a desktop product, but something that can be done on the web and takes advantage of the huge power of the web: collaboration, instant feedback, mashups, live data from the web, contextual search.
* All the quotes are from Writely Blog, which now redirects to Docs & Spreadsheets blog.
