The days when Microsoft ruled your PC could soon be over. The software giant, still reeling from the £345m fine imposed last month by the European courts for abusing its market position, is now facing stiff competition from a host of upstarts offering free word-processing packages to rival Word and Microsoft Office.

In recent weeks there have been several launches of free office suites, some for downloading to your PC and others to be used online, allowing you to store your work remotely on the web – dubbed “cloud computing” – rather than on your hard drive.

Last week Adobe, the publishing software giant, bought Buzzword, a new online word-processor (preview.getbuzzword.com ), which offers a stylish set of typefaces and handles images and pictures with aplomb. It still suffers from the Achilles heel of online applications: in our tests it often lost connection with the server (despite a perfect internet connection) so we couldn’t save work. But Adobe insists the program is only in testing guise and, if reliability improves, could prove a decent, cost-free alternative to Microsoft Word.

Google recently added the ability to create PowerPoint-style presentations to its online word-processing service (docs.google.com). Or if you don’t want to place your faith in online software, IBM has launched a free office suite (symphony.lotus.com) that you can download and run from your PC, just like Office.

All these programs allow you to convert files into the older, 2003 Word format, so your friends and colleagues will be able to read them.

Microsoft still offers the best word-processing packages, but as its free rivals become more sophisticated, consumers may think twice about paying Bill Gates through the nose.

Is Microsoft worried? You bet. It’s about to launch Office Live Workspaces and Office Live Small Business (tinyurl.com/26lcf9), which will allow the storage and sharing of Word, Excel and PowerPoint files on the internet, although you’ll still need Microsoft Office to be able to edit them.

Explore Tech & Web

• Personal Tech

• The Web

• Gadgets & Gaming