I just got done checking out Microsoft Office Live beta release over lunch and my mind has been spinning on it all afternoon. Not for any of the reasons you might guess. The release is actually quite predictable. It has been hailed with an equally predictable host of reviews criticizing its lack of true innovation in the midst of a Web 2.0 catalyzed collaboration renaissance as well as more courteous reviews from those established enough to know it is good business to be polite to Microsoft.
What has fascinated me about this release is that it illustrates how incredibly difficult it is to break away from an established paradigm of thinking. It brings to mind a story I once read of a British colonial expedition in the northern subarctic regions of Canada. They died from exposure to the elements and were found by some of the local Native Americans who were passing through the area on sleds. This sounds like a typical tale of the hazards of 18th century exploration until you learn that the reason they became stuck was that they were trying to take a heavy horse drawn coach further weighted down with heavy trunks through the arctic wilderness. One of the members of the party was of a certain status and they had brought his coach with them across the ocean on the ship. It really makes you wonder if even one among the expedition noticed at some point that the landscape had radically changed from what they knew in England and raised his voice to question whether this de rigueur mode of transportation was still appropriate.
Microsoft Office Live Workspace basically extends the Office paradigm to include web services. It wouldn't be terribly unfair to describe the core of its new functionality as allowing you to save your Word files on a hosted drive that multiple people can access (although admittedly only one at a time with notifications when it's your turn to edit) instead of on your local machine. In their defense, Microsofts product managers even admit that this product is optimized for people who use office everyday, don't know how to upload a document, and don't want to send it via email. The integration with Outlook is actually pretty slick, but it is held back somewhat from the fact that it only really works completely as designed if you are running a computer with a Microsoft's OS, Microsoft browser, and using the latest office suite.
As an expansion of Office's functionality I think Microsoft Office Live Workspace is a nice improvement and makes the products more flexible. But, in a time when there is so much exciting innovation going on in the collaboration space it is almost painful to see the traditional document management paradigm of Sharepoint married with hosted file storage and called "collaboration". I'm sure our intrepid explorers realized at some point after they stopped making progress that simply calling their coach a sled didn't get it unstuck.