It is just speculation on my part but it may very well be possible. Now that would really change the landscape in any fight with Microsoft. It would put Google in the server software business as well as Linux development. They could then offer OpenOffice (a much better one improved with Google knowhow) via a web service. They seem to be doing some interesting things for NASA right now:
The company announced last week that it plans to build a one-million-square-foot campus on NASA's Ames Research Center in Silicon Valley. The two entities plan to partner up in a host of purposely vague areas, including "large-scale data management, massively distributed computing, bio-info-nano convergence [whatever that is] and encouragement of the entrepreneurial space industry," according to Google's press release.
So maybe they are going to try some kind of distributed computing and data storage over the web type of thing. It sure would be cool to have some sort of Google search of all your documents stored in some offsite area that is backed up every day (or maybe hour or minute.)
Of course the security would have to be iron-clad or it will be another way for hackers to steal data. Google seems pretty good at protecting security (that desktop search screwup notwithstanding) when compated with MSFT. I'm sure companies will pay big money to put something like this in place. No more NAS and they will all have a ready made hotsite at least when it comes to their data.
Google could then create some sort of very secure web collaboration suite that would challenge MSFT. This could be done with an enterprise level chat client that could be developed in-house or possibly made by Yahoo. A combined company will mount a serious threat to MSFTs dominance in the market for sure.
It would change the nature of Google but I think it would be a very forward thinking move. It will lauch the time when software will become more web-based then PC based. We won't have to store data or even the applications on the PC or even on the business site anymore. All of that stuff will be taken care of on big server farms at Google headquarters or somewhere around the world. Sun was talking about this during the bubble era but now we have players like Google that could make it a reality. SUNW+GOOG>MSFT for sure.
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