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Microsoft (NSDQ:MSFT) is disputing Google (NSDQ:GOOG)'s recent suggestion that companies should hold off on upgrading to Office 2010 and instead use their existing versions of Office in conjunction with Google Docs. Google's rationale is that Google Docs actually makes Office 2003 and 2007 better because it can store Microsoft Office documents in the cloud and share them in their original format. Google also plans to add real-time collaboration from within Office documents in the coming months using technology it gained from its March acquisition of DocVerse.
But Alex Payne, director of Microsoft's online product management team, says Google's position that Office 2007 and 2003 can work seamlessly together isn't accurate, in part because Google Docs converts Office files into a different file format for viewing and editing, which strips out fonts, styles, charts, and other page elements.
In fact, Microsoft has made sure that Office 2010 files created with the rich client are "almost identical" when viewed through a Web browser using Office Web Apps, according to Payne. "We strive for high fidelity between the PC, phone and the browser and we are very excited about the new collaboration capabilities this will enable," Payne said in a Tuesday blog post.
Stephen Elop, president of the Microsoft Business Division and one of the company's foremost cloud proponents, also dismissed Google's claims of Office-Docs interoperability.

“It clearly shows their lack of maturity and lack of understanding for the business market,” Elop told The New York Times Wednesday. “Companies don’t want to mix their technology.”
Google earlier this week slung some mud in the direction of the Microsoft Office 2010 lovefest, making the case that customers seeking to upgrade Office won't get there by buying Office 2010.
"If you’re considering upgrading Office with Office, we’d encourage you to consider an alternative: upgrading Office with Google Docs," Matthew Glotzbach, enterprise product management director at Google, said in a Tuesday blog post. "Google Docs represents a real alternative for companies: a chance to get the collaboration features you need today and end the endless cycle of 'upgrades.'"
Microsoft often hypes the cost advantages of its products over those of competitors,' and Google is giving the software giant a dose of its own medicine.
For companies that already have Office 2007 or 2003, the only cost involved is the $50 per user annual licensing fee for Google App Enterprise. In contrast, Office Professional 2010 costs $499, and customers must also pay for Sharepoint 2010 software, client access licenses (CALs) and associated hardware, according to a cost comparison chart in Google's blog post.
The reviews of Office 2010 are largely positive, and the fact is that Microsoft's enterprise and volume licensing customers won't have to make the call on whether the new collaboration features are worth the extra cost.
But by banging the lower-cost drum, Google is taking a page straight from the Microsoft playbook, and in what is still a tough IT spending environment, Google's case might make sense to a lot of companies.