Online applications offering word processing, spreadsheets and personal productivity will make big desktop programs like Microsoft’s Office obsolete within ten years.

So claims Sridhar Vembu, whose online applications company, Zoho, reach 1 million registered users in late August.

Zoho has been targeting the market for three years and is adding 100,000 users a month. While its products likely trail Google’s online productivity apps in popularity, the Pleasanton company is drawing a lot of interest from users who want to collaborate (which is harder to do with desktop software) and who value the security of storing documents in the cloud as opposed to on a laptop, said CEO Vembu.

In three to five years, the battle between desktop and online apps will be fiercely engaged, he said. In 10 years, the future for desktop software will be bleak, though some people will continue to install it on their computers, he added.

Zoho says about 30 percent of its users are students and about 50 percent list their company names when they register, even if they use online documents for personal affairs.

Between 200,000 and 300,000 log on every month to work on documents. The rest come to the site when they are asked to view or collaborate on documents.

Desktop software still has more features, but “we’re getting closer now,” says Vembu. The company makes money by signing up corporate users.

By Mark Boslet, Editor at Large.