There been a lot of talk today about Google releasing a suite of hosted applications, starting with basic communications (email, talk) running on your own domain and then more Office-like apps such as word processing and spreadsheets. Most of the discussion has been in casting this as a competitor to Microsoft's Office. But I think there's something entirely different (and a lot more interesting) going on.
As Anil Dash discusses here, these web-based apps are not meant to replace Office but to complement it by doing things online that desktop software just can't do well. What might those things be? I think we have a hint in the spread of embedded video, courtesy of YouTube. The ability to easily embed into any blog page a full-featured videoplayer dedicated to a single video is a large part of YouTube's success. It doesn't require you to go elsewhere or download anything--it just works.
Now imagine the same model working for data. Rather than me posting static jpeg charts and links to Excel spreadsheet files, what if I could post data the way I post videos: as an embedded mini-app that simply displays the data in a useful way, allowing readers to manipulate or copy it at will? This would be a little like what Ray Ozzie (Microsoft's Gates V2.0) calls "Live Clipboard", which is a proposed way to copy and paste code, structured data and even functionality from website to website, just as we currently do with plain text.
That's what I want. Not an online spreadsheet that simply replicates what Excel already does perfectly well on my laptop, but small spreadsheet elements that I can paste into a blog post in the form of a specific data set or graph. The fact that they're hosted elsewhere is what would make them simple enough to use, just as embedding YouTube video is so head-slapping easy today. That's not yet the case for the woefully under-featured Google spreadsheet (there's no graphing and you can't make it open to all), but don't be surprised if Microsoft under Ozzie does better with Office Live. The embedded functionality era has just begun. YouTube is just the start of something much bigger.