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Uh oh, app takeover. I don't know how Microsoft is going to react to Google adding a crucially missing feature in Office and leveraging its software for its own purposes.
Maybe this will motivate them to get their rears in gear. The fact that they've had SkyDrive and various sync/mesh technologies, yet haven't done this is downright embarrassing.

I suspect MS thought they could do this in the enterprise via SharePoint first. I think now they'll have to change their plans.

I've been told by a friend who happens to work for MS that they've had this stuff working for years, but it's just been more lucrative for them to not include it (another clue that they have an entrenched monopoly in Office software).

Just like Google ChromeFrame and IE9, I hope this pushes the Office folks to release something better so the Google "barnacles" don't destroy their platform.

Er? I thought they already did add sync with SkyDrive and co-authoring (at least in Word and Powerpoint) in 2010?
They have syncing with SkyDrive. But no co-authoring that I know of. Link?
http://blogs.msdn.com/b/mvpawardprogram/archive/2010/12/20/m...

"Microsoft Office 2010 enables technology known as co-authoring, which gives you the ability to edit the same file at the same time as people in other locations. No more waiting in line to get your work done, no more getting locked out of your files, and more options for real-time collaboration with your team. What applications enable co-authoring? You can use co-authoring in the Office 2010 versions of Word and PowerPoint. Co-authoring via shared notebooks is also available in Microsoft OneNote 2010. And, simultaneous editing is also available in Microsoft Excel Web App and OneNote Web App."

Although it looks like there are kinda weird limitations on it, in that apparently Word and PowerPoint co-authoring only work in the desktop apps (and not in the web apps, but you have to save to SkyDrive), Excel co-authoring only works in the web app (and not in the desktop app), and OneNote is the only one that works in both the web app and desktop app.

Thanks. The UI for this is not very obvious. Had I known this with Word I would have used it for a while now. I'll have to try it now.
I don't know how Microsoft is going to react to Google adding a crucially missing feature in Office and leveraging its software for its own purposes.

If Google isn't using undocumented APIs, then they're doing exactly what Microsoft wants: developing software that "plugs in to" the Microsoft ecosystem.

Except in this case it serves as a bridge to use something other than the Office suite to edit documents, which could be problematic for Microsoft and not necessarily something they want.
This. If my document is stored in Google's system, and I want to get to it from a computer where I don't have MS Office, how do I do it? Google Docs.

"Oh hey, this Google Docs thing works pretty well in the browser. Why do we have a separate program again?"

Also, "Why do we need to update to Office 2010 or 380 or whatever that next crazy version number is, when this plugin makes sharing and co-authoring work in the Office version we already have?"
It's not a missing feature. Microsoft office has almost-full-featured in-browser document editing (http://www.officelive.com/en-us/). It actually has a really slick UI (like the desktop office), and more importantly to me, works perfectly on Linux.

Edit: as another commenter mentioned, it also has co-authoring; not as slick at google docs at chatting, but it worked well for me.

Many of you have also asked about availability for Macs. Unfortunately due to the lack of support for open APIs on Microsoft Office for Mac, we are unable to make Google Cloud Connect available on Macs at this time. We look forward to when that time comes so we can provide this feature to our Mac customers as well.

In case all you want is to access your documents as files: http://code.google.com/p/google-docs-fs/

Congratulations DocVerse! What an awesome group of people.

For those who don't know them, Google acquired them last year presumably to build exactly this.

From my experience, integrating with MS Office/Outlook APIs is no walk in the park, so syncing with Docs is friggin' amazing.

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Ahh, I was wondering what was powering that. Thought it might have been an evolution of the etherpad stack.

Oh how I miss etherpad.

How does this functionality compare to the upcoming Office 365?
I think dropbox it's not going to be acquired by google...