well, it didnt take long for Microsoft to nudge this innovation of Google! that was expected anyway - with Google being able to create something simple yet effective that surpasses the complex and paid subscription that ms office uses.

The Realities of Google Cloud Connect - Why Microsoft - Site Home - TechNet Blogs

microsoft disputes that security is an issue etc. however google cloud connect users remind us that each document is by default set to private.

microsoft disputes that documents are not saved, google cloud connect "auto saves" the document at brief intervals or you can manually save.

the gist is that google cloud connect is a first step made by Google to encourage the use of web based apps and storage -- "cloud". Microsoft is yet to catch up to providing free and user-friendly services like this