I expected them to sell "application server in a box" with maintenance contracts. That will assure the companies that their data never leaves their control. Big companies would not allow their data to be saved in a third party server with independant logs of files subject to discovery and subpoena etc. But what google offers seems to be the higher level service than the free service but the data is stored in Google servers. May be this is a move by Google to pick the low hanging fruits, establish a large user base documents in the ODF format and capture the market of "I want my data anywhere, I dont care if you store it" people.
But in the long term, Google must sell "all-your-applications-in-this-box" server to companies. What Google is peeling away will not make a dent in the revenue picture of Microsoft in the near future. These users might have used MS applications, but either they are using old obsolete versions without upgrading or using bootleg versions. But if millions of users move to this application and move to ODF, MS wont be able to play the game of ever changing file formats and macro-api changes to keep the competition out. Once a standard that is really neutral and not controlled by any one company takes hold, free market will make sure there are some competition. Still MS will end up with a substantial market share but there will be alternatives for the users.