A Hotmail co-founder, Sabeer Bhatia, is placing his bets on an online office productivity suite that is positioned to compete with similar offerings from Microsoft and Google.

Instant Collaboration Software Technologies Pvt. Ltd (InstaColl), a Bangalore company co-founded by Bhatia, unveiled its Live Documents last week, an application that allows users to access and work on their documents online using a browser, and collaborate and share documents in real-time with others.

The software supports any browser that supports Flash from Adobe Systems Inc. and runs on any computer operating system, said Sumanth Raghavendra, chief executive officer of InstaColl.

Online documents can also be synchronized and worked with off-line, using a desktop client that wraps around an office suite running on the desktop, Raghavendra said. Live Documents automatically synchronizes all changes, the next time the user goes online. Users can work on the document in Microsoft Office when off-line, for example, and then the document will be updated in Live Documents for online collaboration, he added.

The hosted service, which is currently available for technology preview at www.live-documents.com, is free for individuals but corporate users will have to pay. Corporate users can sign up for the hosted service, or run a license of the software on an internal server within the company, Raghavendra said.