Although both Microsoft and Google dispute that the two companies are actually competing against one another, the fact of the matter is that they are intersecting on too many levels to deny a direct rivalry. Stripped down to their respective core businesses, Microsoft is the biggest software company in the world, while Google is an online advertising giant, leading at a distance the rest of the pack at a global level. But in the end, it's all about market share, eyeballs, and end users (both corporate and home-based), and the consumers are the same for both companies.

What is indeed radically different with the two giants is the business model implemented. Google has all its money bet on Software as Service. Microsoft, on the other hand, is hard at work delivering a Software plus Service approach. The Mountain View search giant is strictly dependent exclusively on its server farms and nothing more. Google lives in the servers and in data centers around the world, and is independent of platform, offering users the possibility to access its services and products from a wide range of devices connected to the Internet. Because it deals with online offerings, Google is the epitome of mobility, it does not need resellers, original equipment manufacturers, system builders, product lines, a shipping infrastructure etc.

By delivering Software as a Service, Google has in fact simplified the equation product-user to a maximum. And it is indeed going after Microsoft, with items such as Google Docs and Spreadsheets. But Google is, of course, limited by the existing Internet infrastructure, by the low appeal it has in the corporate environment and by the users accustomed to traditional software offerings. On the other hand, almost every piece of software that is currently connected to the desktop can be transitioned online. Eric Schmidt, Google's Chief Executive Office, estimated that approximately 90% of today's software can be migrated online and offered in the cloud. With a model that monetizes eyeballs for advertising revenue and not the actual software, Google's online future seems bright, as the Mountain View company currently owns the online advertising and search engine markets at a global level.

Microsoft is a presence in the cloud computing race, too. But, the Redmond company's extremely successful desktop franchises are its Achilles' heel. With offerings such as Windows Live and Office Live, Microsoft is testing the online waters, but in a manner designed to deliver only a superficial impact to the business built around its flagship products, the Windows client and the Office System. It is quite a task preparing for cloud computing, while being firmly anchored on the desktop by having a near-monopoly with both Windows and Office. This is why Microsoft is going with Software plus Services, having set the Live suites as complementary offerings to its traditional products.