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Microsoft Struggles To Face The Google Threat

Microsoft and other software makers are trying to figure out the best way to face the challenges offered by Google.

The line between Web-based applications and their inside-the-firewall counterparts is getting fuzzier by the minute, according to several high-tech leaders. And that's causing a lot of angst among tech providers.

Google hopes to penetrate the corporate sanctum with its search appliance and other offerings. Meanwhile, legacy software makers, epitomized by Microsoft, are trying to adapt to a new software as a service (SaaS) worldview.

Google, with its pile of cash, is able to buy its way--at least initially--into any market. The Mountain View, Calif. Internet search kingpin bought Urchin a few months ago and "pretty much started giving away" its Web analytics, said Rafiq Mohammadi, CTO of Interwoven, Sunnyvale, Calif., maker of enterprise content management systems at Saturday's annual Harvard Business School Cyberposium in Boston.

Microsoft, which derives billions from the "rich client" world of Windows and Office, clearly sees the threat, but seems positioned to straddle a world of thin and thick clients. One partner says its plan is to have offerings for three scenarios, "thin client, fat network" where most functionality resides in the cloud; "fat client, thin network," which is basically the old Windows and Office model; and a hybrid for companies who want to mix and match such capabilities as needed.

"The challenges are interesting," said Steven Sinofsky, senior vice president of Microsoft's Office business. He said many corporate customers still prefer on-premise software and systems that are under their control. (Microsoft just made early code of Office 12 suite to a limited number of testers.)

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