Microsoft gave me a test drive or their Office Live, software as service, offering and I must admit there are a lot of things to like about this. (There are a few things that concern me too, but that may turn around.)

BTW: I am interviewing Dean Nicolls, Senior Project Manager with Office Live next week on my podcast so tune in and hear more about the future of Office Live.

So, where to start.

Office Live is aimed at being many things, and, if it can pull them off, it will be an incredible small business tool, both for marketing and managing the business.

The initial push is a tool that allows you to create websites – The tool called, Office Live Basics, is free and comes with a domain name, hosting, a site designer and 5 email account – again, all free. (Upgraded version for a $30 monthly fee)

I think that the real potential in this product though is something called Office Live collaboration. collaborate integrates with your website and comes with a host of business applications for sharing, managing storing and collaborating with clients and co-workers. Web applications like calendars, contact managers, project and sales managers are built in.

The service is in beta at the moment, but when the full version of Office Live launches this fall standard office programs such as Word and Excel should integrate nicely.

This is a massive undertaking and may change the way small businesses view networks and computing in general. It certainly offers a glimpse where one company is headed.

Okay, some concerns. Can the service stay nimble enough for small businesses to bank on? The initial “upgraded “website offering only comes with 50Mg of storage. This may serve some, but it’s nowhere near enough for a halfway hardy content site – think video and audio marketing tools and you’re up to 300mgs. Bill, add more mgs.

Right now you need an invite or key to beta test – I’ve asked for some to give to my readers, I’ll keep you updated.