Microsoft is to release a preview of the stripped down web-based version of the Office 2010 product suite in August.
A technical preview of the desktop version of Office 2010 is already available, but Microsoft plans to keep the online version under wraps a little longer.
The web-based version of Office 2010 will be available for free to millions of Windows Live users and businesses with long-term Office licensing agreements.
Analysts have said the move could put $4bn in revenue at risk, but will keep as many people as possible using Microsoft applications and is probably worth the gamble.
The technical review, due next month, will confirm how much software Microsoft will be giving away for free and will indicate just how much the firm is willing to risk.
The technical review to a select group of users will be followed by a public beta at the end of the year and a full release in early 2010.