Microsoft has begun trials of its new web-based Office system, 'Albany'.

The computing giant's new system would allow it to charge users a monthly fee to access programs such as Word, Powerpoint and Excel.

As part of the new online offering, Microsoft will back up users' documents on its servers - offering additionally security and giving people the opportunity to share their documents.

Microsoft has yet to reveal how much a subscription to the programs would cost - but analyst firm Gartner has predicted that it would drive down the cost of PCs as manufactures would not have to incorporate a license fee into the cost of each machine.

In a statement, Microsoft Albany project manager, Bryson Gordon, said that the program is aimed at consumers who have "expressed frustration at having to spend time and effort installing different types of software, keeping current on new versions, and getting their computers set up".

It will also cut down on costs for businesses as they will not have to buy and run as much expensive computer equipment in their own offices.

This announcement follows news that Microsoft has unveiled an invite-only test of its new Live Mesh service, which allows users to access and share files from any location.