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I don't know if they'll do it, but I'd love for them to offer a hosted VSCode product. It seems technically fairly feasible.

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Not MS but there is a project in the works for roughly that(uses same base Monaco editor). Current version of VS code does actually rely a lot on file system stuff.

https://github.com/theia-ide/theia

This is a great suggestion and I hope that VS Code gets there (and with it Python support). Meanwhile, for an approximation check out:

https://notebooks.azure.com

Rumor has it that its successor, ie JupyterLab, may use the VS Code Editor as its code editor in the future.

Visual Studio Online, the predecessor product of VS Code, uses the Monaco code editor.

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