update SINGAPORE--Google Apps is not a strong competitor to Microsoft Office and won't impact Microsoft's ability to make money off its productivity software suite, according to Steve Ballmer.
Speaking at a media session here Wednesday to mark the company's 20th anniversary in the country, the Microsoft CEO said: "On the business side, Google has a pretty weak offering, [lacking] features for corporations such as management and security [with Apps]."
Ballmer said Microsoft's recently-released free Web-based Office employs the traditional "freemium" model, where the free software offering may be suitable for consumers, but insufficient for enterprise needs.
"For the business aspects beyond the consumer, you'll want full Office and we still have a paid product for that," he added.
He pointed to China Navigation, a company based in Singapore that had switched to competing software-as-a-service (SaaS) product, Google Apps but later moved back to Office.
Ballmer also took another swipe at Google over its stated reasons for leaving China: "The real reason Google left China is not [because] of the bad guys. There are bad guys everywhere. You can't say you don't want to do business in some countries because hackers live there."
He also noted that Microsoft is doing more to further the cause of free speech in the country compared to Google, which had protested moves by the Chinese government to censor search results.
According to Ballmer, Microsoft censors search results in response to government mandates but "we put up a big notice that says we took something down and we leave it there".
"We don't want our Chinese employees to go to jail. I think our actions will move free speech forward much more than Google's. [Besides,] China is not the only country that practises censorship," he said.
He added that Google's exit may not have much impact on Microsoft Bing's market share in China, noting that the much bigger search competition was local incumbent, Baidu.
Ballmer acknowledged that Google's greatest strength over Microsoft is in the search market, and named Amazon Web Services as the biggest competitor in the cloud space when pitted against Microsoft's Azure offering.
Private cloud will co-exist
On Microsoft's hybrid cloud response to SaaS it calls "software plus services", the CEO said private clouds will continue to draw demand alongside public clouds.
Demand will come from governments and enterprises that have highly-sensitive data they need to protect wihin their shores or even within the four walls of their companies, he said.
He noted that one of Microsoft's priorities in designing aspects, such as caching, into Azure is to take into account bandwidth limitations of emerging countries. "We are designing clouds to accept the reality that not everyone has the bandwidth they need," Ballmer said.
Yesterday, Salesforce.com CEO Marc Benioff said the concept of private clouds does not encompass not "real" cloud computing and that it does not offer users economies of scale that a true cloud model offers.
Ballmer was in Malaysia yesterday to launch the company's cloud computing services.