The success of Google was a "wake-up call" for Microsoft . That's according to the organisation's own chief software architect, Ray Ozzie. Ozzie, who replaced Bill Gates in the top technical role, made the revelation at a Goldman Sachs investor conference yesterday.

He was specifically referring to the revenue inherent in web advertising and the opportunity it presented.

Google's success has had a profound impact on the Redmond-based company, which has now invested more in the web and realigned some of its software strategy to subscription and ad-based models.

"Google's success very clearly caused an inflection point within the industry and within Microsoft," said Ozzie during the question and answer session.

Ozzie admitted "there will be some substitution of one thing for another," referring to the fact that small businesses would rather use online applications such as Office Live than buy an expensive server.

Microsoft continuously reiterates that the opportunity is now for hardware and software that is more than single-dimensional and - as Bill Gates said in his CES 2007 keynote - "interacts with great services on the internet".