Sheth takes a subtle shot at Microsoft when he says "if all we did was make Office, as it is, in a Web browser, there's not a whole lot of value there."

Microsoft's Web apps "are very good for viewing, and not as good for editing," he continues.

Google is trying to enable collaboration between employees who use Google Docs and those who use the non-cloud version of Microsoft Office, in part by acquiring which brings the collaborative functionality of Google Docs to Microsoft Office.

"It's an Office add-on," Sheth says. "The idea there is we could be working in Microsoft Word together, but the document actually resides on the server on Google Docs."

Because of this integration, Sheth says, organizations can let users pick whichever tool they want and still be able to work together while gaining the benefit of Google's real-time collaboration, which lets users collaborate on a document and see each other's changes immediately.