Google has unveiled its latest set of upgrades to Google Docs. The new improvements clearly aim to make the free online service a more robust competitor to Microsoft's Office applications.

In a blog post, Google announced improvements in the formatting area for its Docs word processing application, including what it calls better "fidelity" when importing and exporting documents to and from Microsoft Office, improved margins and tab stops, better image layout and an enhanced in-document comments system.

Docs, which Google has in the past acknowledged doesn't match the sophistication or the features of Microsoft Office, is now architected in a way that will allow for faster and significant improvements, according to a Google official.

"We have built a brand-new technology foundation that lets us innovate more quickly," said Anil Sabharwal, a Google Enterprise product manager.

The new document and spreadsheet editors previews will roll out to Google Docs users over the next few days, and the drawings editor is already available to all users.

Google Docs is available as a standalone product and also as part of the broader Google Apps collaboration and communications suite.

The word processing editor in Google Docs now offers simultaneous collaboration. That addition comes just months after Google bought AppJet, whose EtherPad product offered very similar functionality.

The rebuilt word processing editor also offers more accurate import of third-party documents (such as Microsoft Word), tab stops, a ruler for adjusting margins, and better in-document image handling. And, in an obvious nod to Word's change-tracking tools, Google's editor will now allow notes and comments to be linked to any part of the document.

The word-processing document editor features what Google calls real-time editing collaboration, meaning people can see others making changes "character by character." Also new is a chat window for collaborators to communicate via instant messaging.

The spreadsheets editor in Google Docs sports similar professional-grade enhancements: There's now a formula bar and autofill functionality; you can drag and drop columns to reorder them. Google says that, thanks to modern Javascript engines in today's browsers, the new, optimised version of the spreadsheet tool is speedier and snappier than ever.

The spreadsheet application now has a formula bar for editing cells, and auto-complete and drag-and-drop capabilities. In addition, the drawing editor now lets users collaborate in real time.

The new word processing, spreadsheet and drawing editors allow up to 50 collaborators to simultaneously edit. Docs in general will now be faster thanks to its new infrastructure.

Finally, Google announced a new standalone, collaborative drawing editor for Google Docs, as well. The company says that the new tool will be useful for creating charts, diagrams, and other schematics.

A downside, which Google promises will be temporary, is the disabling of the Gears offline technology in Docs as of May 3. Google expects to bring back the ability to work when disconnected from the Internet soon, taking advantage of HTML 5. Gmail and Calendar will continue to use Gears.

While Google has all along touted the collaboration capabilities that its software-as-a-service model gives Docs, the office suite has lacked enough features to prevent organisations from using it as a complete replacement for Microsoft Office.

In particular, users have complained about difficulty formatting word processing documents, forcing them to export Docs files to Microsoft Office for things like pagination and setting margins.

So far, the strongest feature in Apps has been its Gmail component, which has proven a viable alternative to messaging platforms like Microsoft Exchange and IBM's Lotus Notes.

Google plans to roll these new Docs features out over the next few days.

Nucleus Research analyst Rebecca Wettemann calls the improvement to Docs necessary and incremental, but not earth-shattering. "These are all things users are looking for. Do these enhancements make Docs a replacement for Microsoft Office tomorrow? No," she said.

Nonetheless, the upgrades make Docs a more credible alternative to Microsoft Office, which helps Google in its campaign for adoption of the cloud-based Apps in the enterprise, she said.

"Google's model is to get people to move to the cloud. The more attractive Google makes its tools, the easier it is to convince organisations about this," Wettemann said.

Google hopes that Apps, which has been adopted mostly by small companies, continues gaining momentum among large organisations with its Premier edition, which costs US$50 per user per year and has management, security and compliance features that enterprise IT departments require.

Google maintains that Apps, built from the ground up with a cloud computing architecture, is a better, less expensive alternative to traditional communication and collaboration platforms from vendors like Microsoft, IBM and Novell designed to be installed on customers' premises and servers.

However, Microsoft, IBM, Novell and other collaboration vendors are busy retooling their software to take advantage of the cloud computing model.

It's important and significant to see Google keep improving Docs, said Ted Schadler, a Forrester Research analyst. "Google continues to invest in this product. That more than anything else is the story. They're not just going to let this thing sit there. They're going to go for it and continue to use the cloud delivery model as a way to innovate faster," he said.

These continuous improvements will go a long way to help Docs and Apps in the enterprise, even if Docs isn't yet on par feature-wise with Microsoft Office, he said. "I don't see this as a replacement strategy but more as an augmentation strategy," Schadler said. "CIOs and IT executives aren't really looking to get rid of Microsoft Office. They're looking to solve employee problems not well-solved by Office. A big one is collaboration scenarios."

As such, Docs offers enterprises an office suite that makes it easier for employees to collaborate, instead of having to resort to e-mailing back and forth files that are stored in their PCs, he said. "Docs provides a better alternative," Schadler said.

A big concern about enterprises remains moving their data out of their on-premise servers and entrusting it to cloud vendors, such as Google, Wettemann said.

Google will likely address that thorny topic on Monday at its Atmosphere cloud computing conference, to which it has invited about 400 CIOs.

In addition to announcing the Docs enhancements at the event, Google will trot out some high-ranking officials to address the CIOs, including Bradley Horowitz, enterprise vice president of product management, Mario Queiroz, Android vice president of product management, Marissa Mayer, vice president of Search Products & User Experience, and Dave Girouard, president of Google Enterprise.

Also speaking will be Senior Vice President of Engineering and Research Alan Eustace, Senior Vice President of Engineering Jeff Huber and Vint Cerf, chief Internet evangelist. In addition to a CIO panel, Chairman and CEO Marc Benioff and CTO Werner Vogels will also take the stage.

It is the second time Google is holding Atmosphere, but the first time in the US. The first edition was held in London last year.