The Guardian found that people weren't willing to pay extra to get the content without ads (though many people seem willing to shell out for ad blockers...). I'd like to see figures on take-up of this service.
Especially because Google's mission statement with their adsense product is based on the idea that people will only see relevant, contextual advertising.
I would have expected that the main barrier to takeup of this service is the fact that the data will be hosted externally. It's all well and good to be using fancy free software, but what happens if Google loses your data? I'd bet a large amount of money that you sign away your rights to sue within the T&Cs. Some companies might have reservations about supplying Google with almost unlimited information about their company.
I can safely assume that i-level will not be sharing all our confidential files with Google anytime soon, and most companies want to have their data staying firmly under lock and key. The only way to acheive this is to use programmes that are stored locally on a user's computer, not on the internet.
Google should be able to break into the small business market with their web based services, but I would be surprised if any major corporation begins to use them. I wonder what percentage of money Microsoft makes from small businesses compared to the amount it makes from Corporate clients.
As Daniel said before, this may be a feint from Google to try and make Microsoft concentrate on releasing too many different products, but it might be able to hurt Microsoft right in the belly if it can capture a good amount of market share in this area.