Google has officially launched Google Apps Premier Edition , its suite of online applications and services for businesses intended to take on Microsoft's Office suite.

Google Apps is the first step towards creating a web-based alternative to Microsoft Office . With 24/7 support, high security levels and low prices, Google believes that its service is a real alternative to using Microsoft products, particularly for smaller businesses with 1-50 employees.

In contrast to Microsoft 's model - which requires companies to buy software, install it on their machines and maintain it - Google will hold the programs on its servers, and customers will access them online.

The basic Google word processor, spreadsheet, calendar, contact management, internet telephony, and messaging applications are already available free for private and educational use.

But the new Premier edition includes a service-level agreement offering a 99.9 per cent guarantee of service uptime, Google said. It also includes 10GB of personal storage, 24/7 support for "critical issues" and a client to push emails to BlackBerry devices, as well as programming interfaces for linking in existing business systems.

Challenging Microsoft

Google Apps, available for $50 (£25.50) per user, may hit Microsoft hard when it comes to the small business market - especially as the company makes most of its profits from the Office application suite targeted by Google Apps.

Web-hosted applications offer a lot of advantages to businesses, according to Robert Whiteside, head of enterprise sales at Google UK. "Businesses running web-based programs have very low start-up costs because they do not need to invest heavily in software, and they can use low-cost thin-clients or low-specified PCs."

Google has not ruled out adding other functions to the software suite. Presentation software, similar to Microsoft Powerpoint , may be added in the future, but prices are expected to stay the same.

Existing personal users will not be charged for the Google Apps service. Instead, Google is targeting businesses, and already some big name clients including Procter & Gamble have signed up.

"We do not have three to five year product cycles," Whiteside said. "These are not the only applications we will bring out. What they are and when they come out will depend on what our users want."

Mark Foulsham, IT director of insurance company eSure , said most people currently use only about 10 per cent of the functionality of existing Microsoft Office applications.

Foulsham said: "I am considering these Google applications. Any alternative to Microsoft which is less complex and provides for the majority of end-users' functional needs, without the baggage of Microsoft software, is a good thing.

"There has to be a balance between usability and integration with existing applications though, and that may be the big deciding factor when businesses are considering a Google adoption."

Google stated that more than 100,000 small businesses and hundreds of universities use the service so far. All of Google's 10,000 employees are already using Google Apps, although Google stressed that this isn't a requirement within the company.