Yes. Office is still the standard. I’ve got friends that work for IBM and who are only supposed to have Lotus Notes installed, but if they want to be able to send files to clients in their native format they have to have Office because 99% of their clients are Office/Exchange customers.
I’ve got a couple of clients that use gmail for corporate email (including my own consulting) and I’ve tried only using Google Docs instead of Office but it just doesn’t work. The features just aren’t there, and frankly I need the files offline for working while flying, on the train, etc.
While I know Office isn’t cheap (I’ve actually got no idea what it costs, I have an MSDN license which gives me a free Office license) for most if not all companies it’s worth it.