Microsoft is very keen to enter the cloud computing market and announced their cloud computing application Office 365. They are also trying to convince the world that they are serious about cloud computing.

Google Enterprise president, Dave said that they looked at the Office 365 announcement and saw nothing new. According to Google Microsoft is seeking to sell more of their  older products only like Windows, Office, and server software like Exchange in a new packaged environment.

Dave also talked about deal between Microsoft and the city of New York, in which he said that he does not see it as a competitive win because they were never invited for the deal. New York has done nothing but they will just add the option to use Microsoft cloud computing services as part of resigning a long-term software deal. He challenged Microsoft with the comment “After a period of time, they’ll look and see that not much has actually changed–they’re still running the same software and still doing big-bang upgrades.”

He also said that they are watching closely Microsoft on sales calls. Microsoft has a dedicated team that goes into big enterprises and convinces them to re-sign the deal with Microsoft. They also offer discounts and other incentives to sweetening the deal. But the fact is Google is growing in the cloud –computing market and they saw a rise up to three times the rate they did a year ago.

The competition between Google and Microsoft is getting bigger and bigger in cloud computing. Google is an older player than Microsoft and has decent user base, so it is very interesting to see their progress in future. The New York and Microsoft deal will make a big impact on their reputation in cloud computing services and Google should be ready to face the challenge.