Office 2.0 is a term used to describe internet-based productivity applications. This is part of the larger phenomenon of Internet-based or cloud computing. It may look strangely familiar to those of us (ahem) who remember the days when serious computing power was centralised on big central servers, like corporate mainframes. In that scenario, lowly users often had only "dumb terminals" that allowed them to interact with the central computer, which did all the heavy lifting.

Then came the move to personal computers, where users had their own software installed locally, and their computers had the power to run it. This provided additional choice and control, but came with quite a large software management overhead.

Now there is a shift back toward central resources... rather than relying on our own computers to run a word processor, spreadsheet, database or other application, we have the option of using an online provider - connect to them with a browser and you're ready to work.

There are a number of benefits that make this way of working attractive:

Portability: you don't need your own computer to work effectively, just a computer with an internet connection and a web browser.

Low maintenance: You don't need to worry about security patches, updates or upgrades. Google Docs, or ThinkFree Office, or another Office 2.0 provider will take care of that for you.

Collaboration: Because your documents are in the "cloud", you can easily permit others to view and/or edit them. Forget the old compatability issues (she's using Word 2003 on a Mac, he has Word 2007 on a PC, someone else doesn't have the right font) You can all use the same software.

There are downsides too:

Limited features: At the moment, you get a much smaller set of features in Google Docs, for instance, than in Microsoft Word. Some have argued that applications like Word offer too many features and should be streamlined. But you might find Office 2.0 options a bit minimal for your taste.

Dependency: if you use applications and storage that are provided centrally, you rely on these services being available when you need them. You also depend on your internet connection so that you can reach the site. If your connection suddenly slows, performance can suffer ,and watching your typed characters slowly appear on screen will get very a---n---n---o---y---i---n---g.

Note: there are some Office 2.0 "hybrid" applications that allow you to work with applications even when you are offline. This option is available with Google Docs - there is an Offline link at the top of the page that prompts you to install the browser extension Google Gears which will enable offline working.

Privacy: Even though you control access to your documents, some will probably be uncomfortable keeping their documents stored on a company's servers.

The two Things this week will give you just a taste of what is possible with Office 2.0. Once you've completed them, be sure to write a blog entry about how you got on.

And if you're really interested in the concept of "the cloud" and where all that data lives, you might like this... and you might be a geek.

(photo of clouds by Flickr user Kables)