Microsoft Office Web Apps enable SharePoint 2010
users to view and edit Office documents from anywhere using a web browser.
Office Web Apps is installed on top of SharePoint
2010.It can be installed on one of the servers on the farm. Based on the size
of your farm, you can have it installed on multiple servers as well. After the
installation of Office Web Apps , run the SharePoint configuration
Wizard.
Once Office Web Apps is installed, browse to Central
Administration -> Manage Services on Server and you will see the below services listed.
Excel
Calculation Services
PowerPoint
Service
Word
Viewing Service
After this browse to Start -> All Programs -> Microsoft SharePoint 2010 Products-> SharePoint 2010 Central Administration
Create a service application for each of this:
Excel
Service Application
PowerPoint
Service Application
Word
Viewing Service
After the service applications are created, activate the feature
at site collection level.
Excerpts from TechNet:
Microsoft Office Web Apps is the online companion to Office Word, Excel, PowerPoint and OneNote applications that enables users regardless of their location to access documents and edit documents. Users can view, share, and work on documents with others online across personal computers, mobile phones, and the Web. Office Web Apps is tightly integrated with SharePoint 2010 Products. When you install Office Web Apps, the Office Web Apps Services are added to the list of SharePoint Services and the Office Web Apps Feature is added to the available SharePoint Features.
Office Web Apps services include the Word Viewing Service, PowerPoint Service, and Excel Calculation Services that are created and run within the context of SharePoint Services. The Office Web Apps Feature and services integrate with SharePoint's robust enterprise content management capabilities to provide users the ability to access and work on your organization's documents from anywhere using a Web browser.
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