Microsoft announced the news on its Office blog, which said, "First, we're renaming Office Web Apps to Office Online, so you know where to find our free online experience."
Further, the blog by Microsoft's Amanda Lefebvre said that the main reason for dumping the Office Web Apps was because of user feedback: "We heard from customers that the inclusion of Apps in our name was confusing. Are they something I install? Do I go to an app store to get them? No, to use them all you need is a web browser."
The blog post also explains that now users can go to Office.com and start using the Microsoft Word Online, Excel Online, PowerPoint Online and OneNote Online starting Wednesday. Users just need a Microsoft Account for using the Office Online.
Some of the new changes in the new Office Online include new free Word, PowerPoint and Excel templates.
The blog post said, "A lot of you don't know that we have an online version of Office because you just couldn't find it. If you're already using Office Online on OneDrive (formerly SkyDrive) or on SharePoint at work, great. We're glad you found it there. You can still use Office Online just like you always have. But we're making it easier to find for the rest of you by introducing Office.com, a discoverable and shareable web page so that you can start using Office Online right away."
Microsoft also promises that the new release will bring more cohesive Microsoft Office experience, which will make it easier for users to share and work together online with Office, OneDrive and Outlook.com.
Microsoft has also added Word Online, Excel Online, PowerPoint Online and OneNote Online in an app switcher which will allow users to switch between email, storage and the files without navigating in and out of the online services.
Microsoft has also asked the Office desktop applications users to give Office Online a try.
You can watch the new look of Office Online here.