A Bangalore start-up named InstaColl, co-founded, chaired and underwritten by Sabeer Bhatia, who did HotMail, which Microsoft bought in 1997 for a reported $400 million, has launched into the Office business sorta like Google, Zoho, Adobe et al with some hybrid online/offline widgetry called Live Documents.

Live Documents, which unfortunately isn't live, is a suite of online productivity apps that its creators claim is the functional equivalent of Word, Excel and PowerPoint in Office 2007 matching features such as Excel's macros and table styles and PowerPoint's live preview.

Documents can supposedly be viewed and edited from within any browser on any operating system. And there's a Flash-based user interface that's supposed to offer a user experience comparable to native Office applications.

InstaColl also says that Live Documents can be used as an optional desktop client application that "wraps around Microsoft Office and embeds collaborative capabilities into these hitherto standalone software applications." A very "embrace and extend" kind of thing if it works.

It's supposed to convert Office apps into Internet-connected smart clients to facilitate document sharing with multiple people editing a document at the same time (what a horrible thought).

There's also offline access, which InstaColl says is a "key failing of current online Office applications."

Edits made on- or offline are supposed to be automatically in synch.

Bhatia is quoted as saying that "Live Documents does for documents what HotMail did for e-mail."

He is also quoted as saying, "We are just a few years away from the end of the shrinkwrapped software business. By 2010, people will not be buying software. This is a significant challenge to a proportion of Microsoft's revenues." Doubt it but guess we'll see.

InstaColl figures it's appealing to those trying to escape from Microsoft and those who want to continue working within its tools without creating two silos.

It claims to break Microsoft's proprietary grip and bridge to other standards such as OpenOffice.

Currently InstaColl is offering a technology preview on an invitation-only basis where you ask to be invited. General availability is promised soon. It's free for personal use and enterprises can get a commercial version either hosted, on their own servers or as a plug-and-play appliance. InstaColl claims to have pre-booked a few commercial accounts like California-based Aricent with 6,700 users.

It's looking for OEMs and resellers.

Since Google says that Google Apps don't compete with Microsoft, InstaColl says it must not be competing with Google though it does offer much of the functionality of Google.

See www.live-documents.com,

Meanwhile, Zoho says users of its Zoho Writer can now read, edit and save their online Zoho Writer documents offline by installing the Google Gears browser plug-in. Documents can then be downloaded.