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A couple of years ago, the CIO of major international airline told me why he had no plans to use open source software: “I need someone to kick when things don’t work,” he explained. With open source, there was no one to kick.

Since he said that, things have changed. Suppliers such as IBM, Hewlett-Packard and Unisys use a lot of open source components, and they stress that, as long as they are paid to make it all work, they will take the beatings when necessary. This customer, like most of his peers, now uses some open source software.

This willingness of the big suppliers to employ and vouch for open source components is almost certainly the biggest single reason why open source has gained ground so rapidly in business. It also explains why the once fierce open source debate has lost much of its ideological fizz: Where’s the revolution, the finance director asks, when the software is free but costs $150 an hour to integrate and maintain?

But now, there’s a new type of software working its way into business, and this may prove more disruptive. Let’s call it Office 2.0, which is also the name of a conference on this subject in San Francisco during October.

Office 2.0 is like Web 2.0, but with a bit more focus on corporate productivity and a bit less on social networking. It means that core office productivity functions such as email, collaboration, project management, content management, and document creation and distribution, can all be sourced over the Internet, either as an application service or a cheap plug-in component, for a monthly or annual fee. And in most companies, those fees will come in comfortably below the marketing director’s bar bills.

Google’s Gmail, its advertising supported email service, and its free Google analytics product, are examples of low-cost services, as is, of course, Skype, the Internet telephony service used by millions of businesses and consumers. Very often, Office 2.0 services use open source components, which helps hold costs down.

Office 2.0 is already sweeping – or perhaps I should say creeping – into businesses. Here at Information Age, for example, we use BaseCamp for collaboration, Opentracker for web analytics, Moveable Type for blogs, and Skype and Pamela for some podcasting functions. But we made no big decision to use any of these – each time, it just seemed the quickest, easiest and cheapest solution. They are not all great, but the annual licence fees for all of these together is trivial compared with the prices we pay for other software.

So now to the big question: Does the arrival of all this cheap software herald the end of expensive, enterprise software?

This is a very big question and we certainly won’t resolve the issue here (readers’ thoughts very welcome). But we can point to three critical areas of debate: function, trust, and price.

Certainly, there are functional and technical limitations to the Office 2.0 approach. Most of the software is simple if not simplistic; customisation is simply not part of the model; and deep process integration is almost entirely out of the question (in the quest for business agility, the service-oriented architecture and SaaS could be seen as alternative, and competing approaches). These limitations will probably restrict take up of Office 2.0 to tactical situations.

Trust is also going to restrict adoption. Storing sensitive, confidential data on most Office 2.0 websites is foolhardy – investment banks, for example, won’t even trust respected service providers such as Salesforce.com to manage their data. And what about disaster recovery, security, and retrieving data if the price suddenly shoots up or the service deteriorates? What about privacy, or responsiveness if something isn’t working properly?

This brings us the third, critical issue of price, because price and trust are deeply bound up in the buyer’s psychology. Office 2.0 services are very, very cheap, but in the corporate world they will suffer from the perception that price is related to quality. Low price means something very important is missing.

Historically, disruptive new technologies usually win in the end because they are so low-cost that functional shortfalls are overlooked. But trust is so, so important, and this may prove more important than any functional deficit.

When the CIO at the airline I mentioned buys enterprise software, he knows the software will not only be functionally rich, reliable, scalable, integrated and integratable, but the supplier will take a million dollar kicking whenever required. But how much power over your supplier does a few dollars a week get you?