From now on, Microsoft's cloud-based Office 365, will be its primary focus of development. The software giant made the announcement as it launched the public beta of Office's next version.

The future of the suite lies online with the cloud-based version released in preview mode, said CEO Steve Ballmer, even though Microsoft will market a new version called Office 2013 that will be installed locally on devices.

"This is the new generation of Office, where it is a service first," Ballmer said, adding that this new version of Office is the first one to be designed primarily as cloud-based software.

The cloud-based versions of Office will be licensed on a subscription basis, while the versions that will be installed locally on machines will be sold in the traditional perpetual license model.

Microsoft held off on providing full details on all the different Office bundles and prices, but it did disclose details on three cloud models that each will include Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access.

The first version, called Office 365 Home Premium, will be aimed at individual consumers and families and include 20GB of storage in the company's Skydrive cloud storage service, as well as 60 minutes of Skype world minutes per month.

The second version, Office 365 Small Business Premium, is, as its name indicates, for small businesses, and includes business-grade email and calendaring and high-definition Web conferencing.

This version is "ideal" for businesses with up to 10 employees, and each user can access it on as many as five different PCs or Macs, according to a fact sheet.

Finally, Office 365 ProPlus is for enterprises and comes with additional features designed for IT departments and large companies.

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Specifically, Office 365 Pro Plus also includes Lync and the form-creation application InfoPath, and each subscriber can use it on as many as five different PCs or Macs.

The new version of Office has also been designed to work best with Microsoft's new Windows 8 OS, in particular with its Metro interface, which is optimised for touch interfaces such as those in tablets.

"This is the most ambitious release of Office we've ever done," Ballmer said.

The CEO explained that in addition to hand gestures, Office has also been optimised for stylus input devices, but works equally well with keyboards and mice.

The first Office applications getting a Windows 8 revamping in the Metro style are OneNote, which is for taking notes, and Lync, which includes IM/presence, Web meetings, video conferencing and audio communications capabilities.

The local version of Office will ship bundled with devices running Windows RT, the Windows 8 version for ARM-based machines, including Microsoft's own Surface tablet. That Office suite will include Word, Excel, PowerPoint and OneNote.

The locally installed Office 2013 suites will be able to tap into the cloud in different ways to interact with online products such as SkyDrive, so that users will be able to save documents on a Microsoft server and access them from different devices.

Those interested in giving the new Office suite a test drive can access it at http://www.microsoft.com/office/preview/en.