Microsoft is preparing an “application streaming” initiative, in an effort to more effectively position Microsoft Office against Google Apps, according to ComputerWorld. Anyone who thinks this is nothing more than a commodity software war needs to think again.

While Google has lined up major colleges to standardize on Google Apps, Microsoft is quietly pushing cable companies to embrace its software as a service (SaaS) product portfolio. Here’s the scoop.

According to ComputerWorld, Microsoft has confirmed that it is beta testing a low-end Office bundle, code-named Albany, that it will offer on a subscription basis. MSPmentor has also learned that Microsoft is pushing cable companies to test Albany as a possible option for small business and home office customers.

At least one major North American cable company plans to promote Albany to its entire customer base, assuming the tests go well, according to an IT director at the cable provider.

Meanwhile, Google continues to win momentum on college campuses, where higher education establishments such as Hofstra University and the University of Phoenix are standardizing on Google Apps.

Big Business

Gradually, Google Apps is pushing into the corporate space as well. The search giant recently partnered with Salesforce.com, and speculation continues that Google may actually invest in Salesforce.com — or purchase the company outright.

Managed service providers should continue to watch the SaaS landscape closely as Google, Microsoft and others evaluate their partner strategies. Ingram Micro’s Seismic team, for instance, recently introduced hosted versions of Exchange Server and SharePoint for MSPs and VARs. Ingram will soon add a hosted version of Microsoft Dynamics (CRM) to the mix.

The dark horse in the online application race is Zoho, which offers low-end SaaS tools plus a growing portfolio of business-oriented SaaS solutions — in such areas as CRM and database development.