Not many individuals or businesses have gone to using a online office suite. Their reasons have been numerous, and for the most part, perfectly valid. Online office suites don't have nearly as many features, they aren't as fast, and when your internet goes down, you no longer have access to them. Some people also have privacy concerns about leaving all their sensitive documents out on a web server not physically within reach.
For the most part, I have been in the camp that liked to store all my documents locally, I liked the control. However, my recent stint with hardware failure has made me totally revise my thoughts on the matter. I had a few documents (those related to my web hosting) in Google Docs, and the rest backed up nightly to an external drive. I have yet to need any of those backed up to that external drive, but I have used those that are in my Google Docs.
It was a refreshing feeling knowing that they were still all there, totally unaffected, being accessed just like I had before. I didn't have to worry about syncing the documents folder from my backup back to my system drive after I get my main computer up and running, I didn't have to do anything, just sign into the website.
I started to look more and more at what I got from a traditional office suite (especially the expensive Microsoft Office), and what I could get by using just a online office suite. I couldn't come up with a single feature . My needs are for basic word processing, spreadsheets with some simplistic formulas, and making some simple fliers. Every ounce of that can be done in Google Docs.
I am what most software companies would consider a advanced user, I use documents all day long at work, I go home and build websites for customers, manage my web server, and even write scripts every once in a while to automate some of my more repetitive tasks. I don't think that 99.5% of users need a traditional office suite any longer.
The only thing that I use at work that I couldn't do with Google Docs is keep the company website updated (currently using Frontpage), but that math does work out, we use a single license of Office Pro for for that, on top of the 100+ licenses of Office that the rest of our employees use, our savings could be substantial. That said, I think we could even use a free Open Office alternative to Frontpage, effectively eliminating our licensing costs for our "essential" office programs.
The concerns that have always been levied against using a online office suite are waning as well, It's much faster than it used to be, more and more features are being added all the time. Google offers for free more storage than I will probably ever need (1 GB). Security is handled via SSL and just making sure you have a complex password. The problem of availability is still at least partially there. But, more and more applications require on internet connectivity to work, so it's becoming increasingly common for when the internet drops out work halting anyway.
I think the benefits far outweigh potential concerns. First, it's free, which is a plus for both business and home users. Secondly, it's available from anywhere, any time which is nice in a case like mine where I had a computer go down. Thirdly, Google has automatic disaster recovery built right in, most people don't know, but their gmail, docs, and apps data is mirrored in more than one data center in different areas across the country with automatic fail-over, so reliability should be as close to 100% as possible.