Recently, during a conversation with a fellow educator, I learned that some schools do not allow students to save files on the school server in order to save space. It just so happened that I was going to talk about Google Apps that day. What a perfect solution! Using Google Apps would keep both parties happy. You could have students do their work using the various Google Apps and not have to worry about using any of the school's server space.
Google Docs could be perfect for individual projects as well as collaborative projects. For example, if your students are working on a collaborative language project, let's say a project about family, they could collaborate and brainstorm on a Google Doc and then present the project using Google Presentation.
Here is a video about Google Docs in Language Teaching:
Here is a great slideshow about ways to use Google Docs in education. It is not specifically for language education but you can definitely get ideas from it: 15 Interesting Ways to Use Google Docs in the Classroom.