Microsoft's SharePoint is the T. rex of collaboration products: big, fiercely competitive, and standing atop the social computing food chain. But smaller, nimbler players are using SaaS to compete against the thundering giant.Expresso, a 14-month old startup, does something Microsoft hasn't yet figured out: It brings Office into the SaaS world. Expresso lets users share and edit Excel spreadsheets online. They can upload an Excel file to an Expresso server and then invite other users to collaborate. Multiple users can work on the same file in real time, right in the browser. The file's owner applies viewing and editing rights down to the cell level.

Unlike offerings from Google Docs or Zoho, Expresso isn't trying to recreate Office. "Microsoft won the Office war a decade ago," says CEO George Langan. Expresso plans to support shared Word and PowerPoint files by year's end.

Langan acknowledges users can collaborate via SharePoint, but it's typically deployed behind the firewall, leaving employees with few options besides e-mail to share files with outsiders.

Expresso's SaaS model requires no up-front hardware or software investment, and no long deployments. Because it's a service, it's been able to quickly integrate with third-party platforms, including Salesforce.com and Cisco's WebEx Connect.

Expresso has 500 paid subscribers, and another 10,000 who've signed up for a free account, Langan says.

Central Desktop also is succeeding with SaaS-based collaboration. Its online platform was originally aimed at small businesses that need to share documents and files. But the company recently launched a new service aimed at companies with up to 1,000 users.

"The midmarket is dramatically underserved," says CEO Isaac Garcia. "They don't have a budget for collaboration."

The new service has a workflow engine that lets users set up simple rules around common business processes. A company can set a rule to route contracts to a manager for approval whenever a new one is uploaded.

By introducing workflow capability, Central Desktop is evolving toward becoming a robust document management platform, which is essential if it wants to succeed in larger organizations.

SharePoint does a great job with its workflow engine, Garcia says. "But the difference in cost and implementation is substantial," he says. The 3-year-old company boasts enterprise customers including Webcor Builders, Ramada, and Oracle.

But there's a tough road ahead. It's no secret that Microsoft has its eye on the cloud. This November, Microsoft made SharePoint available as an online service. Microsoft Office Live Small Business has Web-based workspaces and document management as part of its Web-hosting offering. And Microsoft is promising more collaborative capabilities around Office 14.

These startups may have gotten to the cloud before Microsoft, but the real trick will be to solidify the gains they've made.