Back in October, Microsoft (MSFT) CEO Steve Ballmer dismissed the idea of Google (GOOG) Apps as a competitive threat to the MS Office suite, saying the product had no traction in the enterprise space and the only people using the product were university students.
But in the days since, Google started hiring salespeople to pitch the product to the enterprise.
Now Steve is taking a different tack: In an interview with CNET, Steve acknowledges maybe Google has emerged as a problem on some accounts, but he now calls Google’s $50 per user per year price tag overpriced compared to Microsoft’s offering.
[Google Apps are] nipping around. It’s not like I would say they have a very serious presence, but they’re out selling essentially the Google apps on a hosted basis to people. We compete very well. We’ve got far stronger and more functional applications, but that doesn’t mean you don’t feel the competition. And there have been accounts certainly where they show up. But they don’t have an on-premise solution. Despite the fact that a lot of people want to move hosted, a lot of people don’t want to move hosted. Google also doesn’t have data loss prevention. There’s a lot of things they don’t have…
Google is neither free nor low cost. That’s not a joke. We’re talking about the enterprise. We’re not talking about some screwball consumer thing now. We’re talking about the enterprise. Google charges a very hefty price, comparable to our prices, when it comes to the enterprise.
The plan remains steady: Microsoft hopes to co-opt the cloud-based collaboration craze by incorporating “Office Web Applications” into upcoming Office 14 (a product we’re still not sure if it will debut this year or next).