The business credentials of online productivity tools were strengthened last week following announcements by Adobe, Google and Microsoft, but experts cautioned that the technology still has some way to go before it can challenge client-based packages such as Office.

Adobe announced its first move into online applications with an agreement to buy Virtual Ubiquity and its flagship online word processor, Buzzword, which allows users to create and collaborate on documents online.

The product’s support for the Adobe Integrated Runtime (AIR) platform delivers functionality such as local file access, and drag and drop from other windows on the desktop that is not possible in a browser, according to Adobe’s managing director of northern Europe, Craig Tegel.

Other features and functionality are planned, according to Tegel. “It is our long-term goal to create a number of ways for Buzzword to work with PDF documents and integrate with Adobe Reader and Acrobat document workflows,” he explained.

Ovum analyst David Bradshaw described Buzzword as the “next generation of online word processors”. He praised its ability to help users cope with unpredictable internet access, something that other solutions struggle with.

“The problem with online apps is they need persistence, so they don’t freeze when the internet link is lost – for that it has to be rich internet clients,” Bradshaw added. “But Buzzword is only a word processor, whereas Google Docs has been around a while and Google is prepared to take it all the way.”

Google announced new functionality for its Google Apps Premier Edition package last week, including spam and virus filtering, policy management and message recovery. The new features are a result of Google’s recent acquisition of messaging security firm Postini.

Also this week, Microsoft has invited users to pre-register for its new Live Workspace offering, which provides access to Word, Excel and PowerPoint docs, enables online collaboration, and provides tighter integration with Office applications, according to Office 2007 product manager Darren Strange. “This is the next step of our journey [into online apps] so expect to hear more about this in the future,” he said.

Ovum’s Bradshaw said as users are still required to purchase Microsoft Office to make use of the capabilities provided by Live Workspace, the service is more a statement of intent than a serious shift in client strategy. “This is a matter of sorting out the brand rather than anything seriously new. But they will obviously launch something like an online version of Office when they believe the time is right,” he added.