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Microsoft takes steps to drown Google Apps before it's too late

According to a new report, the company is doing everything from cutting prices to increasing commissions to resellers to stop enterprise customers from using Google Apps.

James Martin/CNET

Microsoft might be a little more scared of Google Apps for Business than it's publicly letting on, according to a new report.

The software giant has, over the last several months, made several moves to stop enterprise customers from adopting Google Apps, according to The Wall Street Journal, which reported on those decisions today. Microsoft has cut pricing on its cloud-based alternative, Office 365, as well as increased commissions it pays to resellers to make the prospect of switching to Google's service less palatable.

According to the Journal, Microsoft has established a "Google Compete" team designed solely to stop its current Office customers from switching to Google Apps. The Compete team's practices weren't fully detailed by the Journal, but in one case, the members tried wooing a major company by inviting executives to Microsoft's Redmond headquarters and showing off product road maps.

In the end, however, the company, Dominion Enterprises, ditched its $2-million-a-year contract with Microsoft to go with Google Apps. Dominion now pays $200,000 a year for Google Apps.

Google's product suite, which includes e-mail, documents, and collaboration tools, is taking advantage of the growing importance of the cloud to appeal to customers. Although Microsoft has historically gone to the desktop with its productivity tools, the company also has Office 365, an offering that puts its many services, including Office apps and e-mail, in the cloud for corporate users.

Despite Microsoft's issues with Google Apps, the software giant is touting Office 365's success. Just last week, in fact, Microsoft said that Office 365 is on track to surpass SharePoint as its fastest-selling enterprise product ever. In addition, the company said that Office 365 is viewed as so important to its enterprise future that Kevin Turner, Microsoft's chief operating officer, said he will personally intervene in order to make a deal happen.

It's possible that Office might become the focal point of a press event Microsoft is holding later on today in San Francisco, but so far, the company hasn't tipped its hand. CNET will be there with a live blog to ensure you don't miss any of the news coming out of the event.

CNET has contacted Microsoft for comment on the Journal's report. We will update this story when we have more information.