Google announced a lab product today, aimed to allow anyone to share/edit spreadsheets online. Google spreadsheets. As John Battelle's so amusingly said, it's the equivalent of "Google: FU, Microsoft".

One of the best analysis have to come from Dan Bricklin (Visicalc guy) who reminds anyone that open-source would be a good thing, and that the ability to host your own server would be a good thing, especially for corporate guys wary of posting internal information online (who wouldn't by the way?)

I am an Excel-related ISV, so you can guess I have an opinion on this very subject. I could go as far as saying Google is trying to eat my lunch with this (I may post an html-based front-end for an xlsgen server sometimes at the end of the year, or next year). But I don't think so. I think spreadsheets is open to many market niches and that Google is simply opening up one, the ability for anyone out there to edit/publish/share Excel workbooks using a web browser.

Even if I am not unhappy that Microsoft might have their coming Office live offering a little canned thanks to this announcement (I expect Microsoft to provide a service where you can host Excel workbooks running under the new Excel 2007 server), I don't think that hurts them a lot because Office Live is yet to prove its relevance, and because the bulk of Microsoft's cash cow is from corporate software, software that runs within the enterprise firewalls.

As for competing in the Excel desktop client, it's more a problem for Microsoft. The competition, especially OpenOffice which employs many Google contributors, is up to speed for 90% of customers needs. MeSays that, short of bundling Office 2007 with Vista, Microsoft may find themselves in troubles getting massive upgrades to the pricey and file-format-breaking Office 2007 sometimes next year.

A good analysis is available here.

As for the technology itself, let me give a few thoughts :

• Google spreadsheets is reportedly driven by a former 2Web employee (Jonathan Rochelle), who used to sell an online Excel spreadsheet tool. Google lab guys did not write this thing from scratch in a few months.
• The back-end looks impressive, it supports the bulk of Excel native features including computations and charts. Its lack of support for Excel macros is actually not a true limitation. To understand this, you need to know that Microsoft themselves are moving users away from embedded macros by increasing the security level by default in their next release, and by (if I'm not wrong) refusing to run unsigned macros in the Windows Vista environment (getting macros to be signed requires a macro code certificate, which in turn costs 500$ a year).
• I believe Jonathan's team wrote the html front-end recently, and that's probably why it does not support charts and other features just yet. But I think that won't be long before they are added.
• What could turn out to be sexy for corporate guys is the ability to hide the business logic of Excel spreadsheets. Hide formulas as well as user functions so that spreadsheets can be shared without risk of alteration neither the disclosing of IP. I believe this feature is the key feature of Excel 2007 services. Take that, Redmond!
• Sharing Excel spreadsheets online, does not mean able to make really multi-user edit possible. We'll know about that pretty soon I guess.
• The integration scenarios between this service and other Google services are obvious, and for instance could help move a lot of Yahoo Finance! users away too. Yahoo! can acquire one of the competing services however (iRows, numsum, zoho, ...), which otherwise will find themselves in troubles.
• The ability to post, share, centralize and then recover an Excel spreadsheet is a good thing for a lot of end users, it means on the one hand they no longer need to worry about their computer crashing and so on (I believe using a USB key is just as great when it comes to this though), and on the other hand they don't need to actually install anything on their computer, which is especially handy for both end users or workers (think administrative rights, the coming Windows Vista limited user environment, the deployment hassles, the time to spend, ...).
• The inside the firewalls scenario must be enabled, since Google won't get away from the obvious privacy problems. A possible integration with Google desktop makes the problems even more blatant.

If executed properly, by that I mean integrated, enabled inside corporate firewalls, and so on, this service has a lot of potential and will cut some of Microsoft's Office market share, as well as drive a lot of users away from services such as classic financial websites where non-Google actors are healthy. Google needs the help of a couple big corp accounts to drive this publicly. At the moment, it's really only a FU Microsoft. This is a nice tool for end users btw.

[Update] : this afternoon, Google started sending passes to test the product. I got one. It is a solid product. Import/Export are solid. Calculations (complete with retained mode) are solid. Sharing works as expected. It is obvious this product is coming from somewhere, what we see is the front-end of a product which has been developed for a number of years. Next step : new features, and integration with other Google services. On the new features front, Google can really invent features as freely as needed, although I suspect a lot of demanding users would start saying "good enough" as soon as charts will join the fray (I expect this to appear in the next 6 months, since the back-end of 2Web already supports these if I am not wrong). As for everyday workers, Google spreadsheets is a solid alternative for cell-based calculations at the moment. It's like a great calculator/finance/account replacement, and you don't have to use the thick Excel anymore for that.