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Computerworld - Raising the stakes in its war of words, Microsoft today said Google simply doesn't understand what businesses need and is failing at pushing its way into the enterprise.

In an interview with Computerworld, Tom Rizzo, senior director of Microsoft Online Services, talked about the company moving its popular Office apps into the cloud, as well its competition with main rival Google.

Rizzo wasn't pulling any punches. The verbal sparring between the two companies has only heated up in recent months, now that they're battling on many different fronts -- including cloud-based apps, search, browsers and operating systems. Just late last month, Microsoft leapt into territory Google has tried to stake out, launching a beta of Office 365 that officially took its ubiquitous Office suite to the cloud.

That move turned up the heat on Google, which has been trying very hard over the past few years to move from the consumer realm into the lucrative enterprise market.

In this edited version of his interview, Rizzo talks about Google's privacy issues, scanning user data, the difference between consumer and corporate needs, and his doubts about Google surviving in the enterprise market. He also said he thinks Google will be shocked to see the momentum Microsoft gains as it moves into the enterprise cloud sector.

What are the biggest challenges you're facing in getting customers to move to the cloud? I think some people are still wary about the move to the cloud, especially around giving up control of privacy, security and reliability. People think if they run it themselves, they have more control about it going down. They're used to running down the hall and yelling at their IT department. If we go down longer than we should be, we give back money.

What is your service-level agreement [SLA] regarding downtime? We put our money where our mouth is. When you talk cloud, people do talk Google. When you look at their SLA, they don't start counting downtime until 10 minutes of downtime. If they were down for nine minutes, they'd say, "Oh, no, we weren't down according to our SLA, we were up the entire time." If they're down more than they should be, they'll give you x amount of days more of their service, you know, the one that was down. Our SLA is 99.9%, and we count all downtime, except for planned maintenance downtime. If our servers crash or e-mail stops sending... we have a sliding scale. We start giving money back.

Our customers said we need to go to our executives and say this is a reliable service and there's a financial solution if this doesn't meet our needs.

Is that the main thing you're hearing from customers adopting Microsoft's cloud-based Office apps? Well, folks like Google, since they're trying to sell you ads, will scan your data and they keep your data. We don't scan your data. We don't keep your data. If you want your data back, we'll give it back to you and we'll delete it out of our data centers. If you look at it in terms of a comparison, we understand business. They come from a consumer advertising standpoint. They need data so they know what ads to service you that you'll click on.

Are you saying Google doesn't understand business? Yeah, Google doesn't understand the commercial business. They get the consumer. A lot of times, consumers are more open in their privacy than a company.... We understand those things because we grew up in the enterprise. Google is akin to Microsoft maybe 20 years ago. The difference is we invested a lot in the space. Whereas, I don't know if they'll be here for the long haul. They've been in the enterprise e-mail and collaboration space for four years and they have less than 1% of the enterprise e-mail market after four years. And that's according to Gartner.

Are you saying that Google is failing? I would say that they're failing, yes. I would say that the results have not shown that they're successful in the space. We've had customers who've gone to Google and have come back to Microsoft.

In an interview with us earlier this year, Google said Microsoft is too far behind in the cloud to ever catch up. What do you think about that statement? I would say we've been in the cloud a long time. We've been there since we did Hotmail -- and that was like 1998 when we acquired Hotmail.

I can understand why Google would say that. They think we're late to the game when we're actually doing the right things to build a reliable service. We are committed long-term to this business. Google went and killed things like Wave. It was the second coming and now it's gone. They also killed offline support. They said offline isn't important because you'll always be connected to the cloud. We're big believers that not everyone has a high-speed Internet connection. Maybe they do in Mountain View [where Google's headquarters are located], but everywhere else offline is critical in any real business context. Google killed offline and didn't even tell customers until they did it.

You mentioned privacy issues earlier. How does that factor in here? Privacy is a tough one. I'm not one to throw stones. Google sometimes is their own worst enemy. The Street View stuff isn't helping them. And their terms of use isn't helping them either. They say in their terms of use, the second you sign up, "We're allowed to use your brand, your name and screenshots of your service in any way we want. We can use it on our Web site, in our marketing materials. We can use it to benefit Google." That's not very customer-friendly.

So what's the biggest differentiator between your cloud efforts and Google's? Privacy is one and functionality is another. We've been working with customers a long time, so we know what businesses want. We are vastly ahead there.... We had to invest a lot to get into the enterprise. It's not only the software. It's surrounding services around that software. It's support, privacy, security, standards. There are a million things you have to do for the enterprise that you don't for consumers. I'd say they're way behind.

It's interesting that Microsoft and Google each thinks the other is trailing It's an interesting space to watch. Let Google say we're way behind as we continue gobbling up enterprise customers. Let Google underestimate us. They'll be shocked when they see all the momentum we have inside this space.

So, how is adoption of Office 365 going? It's been going extremely well. Over 2,000 organizations sign up for the beta every day. We're getting lots and lots of people interested.

When will it come out of beta? We're on track to ship in 2011. Obviously we want to get good testing in. We've had large deployments on-premises but we want to get that larger test time. We want to make sure we have enough bake time.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at  @sgaudin, or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

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