FOSTER CITY, Calif. -- The battle between Google and Microsoft over cloud services is heating up. Last week, Google (NASDAQ: GOOG) won a coveted contract to provide Web services to the General Services Administration (GSA), beating out Microsoft (NASDAQ MSFT) in the process, but Microsoft isn't taking the news lying down.
"That contract is email only. They (the GSA) still use Office on the desktop and we can win on the collaboration side," Thomas Rizzo, Microsoft's senior director of online services, told Internetnews.com during a wide-ranging interview here. "We've had lots of government wins, including the Department of Defense for Exchange, the Army, the Air Force and city governments," he added. (A Google spokesman says the GSA will be using Google's collaboration tools).
Rizzo concedes that Google "is going to get some wins" and that it's hard to have a conversation with customers about the cloud without Google's name coming up. But he's also quick to attribute that to Google's "consumer halo" from its popular search engine.
Google, according to Rizzo, is giving IT an ultimatum to move to the cloud, while he says Microsoft offerings are more flexible since the company continues to offer both on premises and online applications and services.
Rizzo said Microsoft is using cloud technology to bring its proven enterprise software down to a broader audience, while Google is moving up from a foundation of consumer applications, like Gmail, to try and win enterprise customers. "Every small business I know wants to be a big business and we give them the tools to do that," he said.
Google spokesman Andrew Kovacs agrees the two companies have different approaches.
"We fundamentally have different visions," Kovacs told InternetNews.com. "To get the most out of Microsoft you need client software like Outlook and Office and that means 80 percent of the IT headaches persist. Our vision is a hundred percent Web and we fully embrace the Web in ways Microsoft hasn't."
While Google claims over 3 million organizations are using Google Apps, Rizzo said Microsoft is signing up 2,000 organizations a day for the beta of its new Office 365 cloud apps.
With Office 365 Microsoft is moving from its traditional annual licensing model to a pay-as-you-go subscription model. "This gives us a chance to take our enterprise cloud to small businesses and we think it's going to speed up deployments," he said.
And while that pay-as-you-go model is similar to Google's, Rizzo insists Microsoft has more battle-tested, comprehensive offerings that are more attuned to the needs of business and IT.
"We've grown up in the business space and I can tell you dating back to 15 years ago when I joined Microsoft, there were a lot of growing pains to make the software great," he said. "With Google there's no support for offline applications and no roadmap. Businesses want a roadmap and to know that you're committed to supporting your products. We support products for ten years even though, like Windows XP, we want people to upgrade."
He then tweaked Google for killing its Google Wave collaboration software project and the offline support for Google Apps.
But Kovacs countered each of those charges. He said Google gives its big customers a roadmap of where its technology is headed under NDA. Google Wave, he notes, was a preview release and never a part of the company's Apps suite. As for the offline access feature, Google continues to offer it for Gmail, but had to drop the feature as part of an overhaul of other applications in its Apps suite.
"We're committed to bringing offline access back even though it was a feature used by a relatively small number of users," he said. "We recognize that those who did use it, found it to be very valuable."
While Google sees an opportunity to win over users frustrated by the limitations of Office, Rizzo said Microsoft is the logical partner to help those hundreds of millions Office users worldwide benefit from Microsoft's move to the cloud.
Google has introduced a number of services designed to bridge the gap between Office and Google Apps including giving users the option of continuing to use the Office interface. But Rizzo claims Google "hasn't done a good job of integrating with Office."
About the only concession Rizzo's willing to make to Google's push into Microsoft's market is say that "competition is always good. It brings out the best you have."
Google's Kovacs adds that while the two firms a battling for customers, it's not a zero sum game. "There is a massive shift underway from client/server to cloud computing and many companies will benefit from that transition, not just Microsoft and Google," he said.
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