Microsoft is test driving a new version of its Office Web Apps suite, whose applications are hosted by the vendor and accessed by users via a web browser.

Improvements in the suite, which includes online versions of Word, Excel, PowerPoint, and OneNote, center on four areas: document authoring, touch interface support, collaboration and performance, Microsoft said on Friday.

Office Web Apps, launched about two years ago and used by about 50 million people per month, includes a subset of the functionality of the applications in the full-featured, PC-installed Office suite.

As a cloud-hosted suite, Office Web Apps have been enhanced regularly on the backend by Microsoft, but the set of improvements being tested now are significant, according to a blog post by Mike Morton, group program manager for Office Web Applications at Microsoft.

"This update is by far the most significant we have ever done and we hope others are as excited about the changes as we are," he wrote.

In the area of authoring, Microsoft has made improvements so documents can look more professional by improving editing, layout, and formatting capabilities. (See also "Edit Docs on Your iPad Using Microsoft Office Web Apps").

Acknowledging the popularity of tablets with touch screens, Microsoft is adjusting the Office Web Apps user interface so that it's more convenient for interaction with hand gestures.

For collaboration, this new version allows users to engage in joint editing in PowerPoint, the only suite application that didn't have this capability previously. Also new is the ability to insert comments in documents and presentations without necessarily being engaged in editing the files. These comments can be replied to as well.

In performance, the new version doesn't slow down its basic operations like typing and formatting as documents get larger. Excel in particular works faster, as do graphic elements in PowerPoint like shapes and drawing tools.

Industry analyst Rebecca Wettemann from Nucleus Research doesn't find the improvements particularly impressive. "Unless a user is primarily accessing a touch device, I'm not sure I see what's compelling here," she said via e-mail.

Office Web Apps is comparable to Google Docs in that they are both hosted by their respective vendors and used via browsers, and neither comes close to matching the functionality in the full-featured Office suite.

How to Join the Test

Those interested in trying out the new version of Office Web Apps can log in to their SkyDrive online storage service account via this special link: http://skydrive.live.com/?officebeta=1.

Another way of testing the new Office Web Apps suite is to participate in the public beta of the new Office 365 suite, which offers full-featured versions of the Office applications delivered and upgraded remotely via the cloud, but ultimately installed locally on users' machines. Office Web Apps is part of the Office 365 beta suite.

In addition to the Office 365 model, which lets each user install the suite on five computers, Microsoft will also sell the new version of Office in the traditional way, as a shrink-wrapped product with a perpetual license that can be installed on a single machine. The latter option will be branded Office 2013.

It's not clear to Wettemann where Office Web Apps fits in with the companny's broader Office strategy. "Microsoft needs to make it clear for whom exactly Web Apps makes sense," she said. "Moving forward with Office and Office 365, does Microsoft need the Web Apps product?"

When asked about this earlier in the week, a spokeswoman for Microsoft spokeswoman said via email that users of the new Office might find Office Web Apps useful in situations when using the browser as the client software is most convenient.

"It is great for document viewing, editing and sharing -- especially on the go," the spokeswoman said.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.