Six months ago Microsoft agreed to change the name of its online file service SkyDrive as part of settling a lawsuit brought by British Sky Broadcasting, which has a trademark on the word “Sky” in the EU. The name will change to “OneDrive” soon, according to a Microsoft blog post. Presumably the name change will be done in a way that is seamless for SkyDrive users. Stop giggling! It’s possible.

[Geeky detail: there are actually two services, SkyDrive for individuals and the very different SkyDrive Pro for businesses. The new names will be OneDrive and OneDrive For Business. In this article I described the confusion in the Office 365 portal, which has “SkyDrive” in the menu bar instead of the correct name, “SkyDrive Pro.” We’ll see whether it’s clearer after the name change. Somehow I doubt it.]

One rumored update to the service is an important fix to a problem with shared folders. SkyDrive already permits folders and files to be shared easily and flexibly but currently shared folders cannot be synced to your local hard drive so they can be accessed like any other local file. Instead, shared folders are only accessible by going to the SkyDrive web site. That’s not a bad experience – the SkyDrive web site is well designed and files can be opened and edited easily from there. It’s just not as natural as opening up File Explorer and browsing to a folder, at a time when all of us are craving a little consistency from our technology. Not to mention that shared folders are not accessible offline for anyone except the original owner.

Liveside.net uncovered screen shots confirming that we will be able to designate “co-owners” of shared folders. Each “co-owner” will be able to sync shared folders onto their own PCs, just like we do now with our own files stored in SkyDrive. It’s a meaningful change for small businesses; it will make it far easier and more natural to use shared folders for collaboration among employees.

Theoretically businesses should be using SkyDrive Pro/OneDrive For Business, but that service is dauntingly complex and offers a much less satisfying sync experience (not to mention that it is several steps behind SkyDrive/OneDrive in features), so many small businesses are using services like SkyDrive and DropBox that were originally designed for individuals. There are still some shortcomings that make them less than ideal for serious business use – security is not bulletproof and it means another set of login credentials for each employee. That’s starting to be outweighed by the price (free) and effectiveness at letting employees access files anywhere. Before long I expect small businesses will discover the online versions of Office programs accessible through the Skydrive web site (currently named “Office Web Apps” but soon to be renamed “Office Online”), which now permit simultaneous editing of the same document in the online versions of Word, Excel, Powerpoint, and OneNote.

There’s no official word on when to expect the name change and the addition of co-owned folders, which may or may not arrive at the same time. One possibility is that both will accompany the release of Windows 8.1 Update 1, currently expected in early April.