Apple's iCloud promises to sync every document and every edit across multiple devices but Apple's idea of every document is every iWork document. If iCloud doesn't play nice with Microsoft Office, it doesn't stand a chance to replace other syncing and file-sharing software, like Dropbox, Box.net and Microsoft's own Windows Live SkyDrive.
Apple's decision to build its iCloud Storage APIs around iWork -- Keynote, Pages and Numbers -- makes a lot of sense. The company has been fortifying its product and lifestyle ecosystem for a long time and iCloud is another incentive to streamline your productivity by purchasing Apple products. But Microsoft Office isn't going anywhere; Forrester Research stated that as of 2009, 80 percent of the enterprise is using some form of Microsoft Office, with 64 percent using Office 2007.
Apple's renditions of Word, Excel and PowerPoint are similar enough to Microsoft's that casual users won't find this to be a big deal. Apple also boasts that its office productivity suite "works well with others" -- iWork documents can be saved in Office compatible formats. But iWork only works well; it doesn't work flawlessly. Formatting in Pages gets wonky when moved to Word; transitions and graphics in Keynote presentations don't function properly in PowerPoint; and Numbers is nowhere near as sophisticated a database manager as Excel. As of now, iWork cannot save documents using the Office Open XML file format (.docx instead of .doc, for example), and Windows PCs cannot open iWork documents.
There are workarounds for these hitches -- third-party add-ons and iOS apps like Quickoffice Pro -- but if iCloud is gunning for simplicity and a wide user-base, both consumer and enterprise, these Band-Aids are just that. If the iCloud Storage APIs aren't compatible with Office, it will deter many people from fully buying into Apple's closed ecosystem.
There are many great features of iCloud -- including iTunes Match, syncing apps over the air across iOS devices, and Photo Stream -- and Apple had a unique opportunity to develop a cloud app that could truly be the end of its competitors. iCloud may destroy Music Beta by Google and Amazon Cloud Drive, but until Apple embraces a truly harmonious productivity suite, it will never woo the enterprise.