Attempting to take market share from Microsoft Office has become one of the great follies of recent years, but contenders continue to line up. The latest rivals are using the ubiquity of the internet to develop low-cost and free web-based tools that can be accessed from anywhere and have strong document collaboration features. However, Microsoft is also taking steps to protect its dominance.

The competition for Microsoft’s Office is not limited to the web; Corel persists with WordPerfect Office and the five-year-old OpenOffice.org was recently bolstered by the appearance of IBM’s Lotus Symphony. However, it is the swarm of web-based efforts that most threatens the Office powerhouse. Several of these firms, such as Upstartle, Zenter, Tonic Systems and JotSpot, have already been acquired by Google to provide it with tools for word processing, spreadsheets, presentations and utilities.

Of the rest, AdventNet’s Zoho survives independently and is seen by many experts as the best of the bunch. Zoho covers all the basic suite components and adds project management, database, conferencing and CRM tools.

Despite the undoubted attractions of these tools, broadband availability and depth of features remain concerns, not to mention data security. As Michael Cherry of analyst Directions On Microsoft put it, “My problem with these web tools is that nobody has explained to me why I should let somebody else store my data and look after my privacy.”

Some watchers say a hybrid model could offer the best of both worlds. Adobe has its own tools for developing so-called rich internet applications that use its AIR runtime environment to work both online and offline, and recently acquired web word processor developer Virtual Ubiquity. Zoho last month added the ability to edit as well as view documents in its Writer word processor using the Google Gears plug-in. Google is likely to follow suit and offer an offline component for its Docs suite.

The hybrid model is also evidenced in the latest Microsoft challenger, Instacoll, a company started by the Hotmail founder Sabeer Bhatia. As well as offering web equivalents to the core Office tools, Instacoll’s Live Documents also supports a collaborative add-on for Microsoft Office programs.

Despite these seemingly powerful new rivals, few believe that Microsoft’s Office cash cow is running out; indeed, the company’s recent growth has been its strongest for several years.

Microsoft also has its own plans to deal with the emerging world of applications delivered over the internet, having recently delivered its Office Live Workspace as a free web area for sharing files.

The company may even be readying a version of Office that can be accessed via the web. Microsoft Office director Jacob Jaffe did not rule out such a development when IT Week interviewed him at the launch of Windows Vista earlier this year.

Finally, Microsoft has the ability to adapt its pricing if rivals begin to take share away from Office. Whatever progress is made in the pure web and hybrid applications areas, there is no certainty that the Microsoft era of desktop apps dominance is coming to an end.