Google gets a break in the clouds.

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Google and software provider Salesforce.com have formed an expanded alliance to deliver online programs competing with packaged software at the heart of Microsoft's global empire. Google 'Apps' including email, calendar, and document writing will be included in software services offered by Salesforce, which essentially serves as a for-hire technology department businesses use via the internet.

"Salesforce.com and Google have changed the game again," said Yankee Group analyst Sheryl Kingstone. "This is revolutionising the way people work."

Salesforce is a leader in 'software as a service' (SaaS), which is referred to as 'cloud computing' because programs are hosted online instead of installed and maintained on users' machines.

Google vice president Dave Girouard said the alliance is unquestionably a shot across the bow of US software giant Microsoft, which has built its fortune selling packaged software such as Office and Outlook. "We don't wake up in the morning at Google and say: 'How are we going to get Microsoft?', but they are going to feel an impact," Girouard said. "We expect this to be part of a new era of computing. Eventually, the whole market is going to move into the cloud."

Salesforce will offer Google Apps free and market a premium service in which it provides technical support for ten dollars monthly per employee using the applications. "Google and Salesforce.com have always had similar models and philosophies about delivering innovations made possible by the internet," said Google chief executive Eric Schmidt.

"Together, we are making more applications and services available online so customers can focus on building their core business rather than the applications that support it." The Google-Salesforce alliance is a boon to both companies, according to Silicon Valley analyst Rob Enderle. Salesforce gets a tie-up with an internet powerhouse and Google gains credibility in the business software sector, according to Enderle. Software and computing platforms as services will underpin the next generation of the internet, Schmidt said at a San Francisco press conference.

"Last year the debate was 'if', now the debate is 'when'," Schmidt said of a shift to software in the cloud. "This is a 20, 30, 40-year vision." The alliance is proof that Google is concentrating on expanding its domain past online search and advertising while rival Microsoft focuses on an unwanted bid to take over internet search veteran Yahoo.

Microsoft is pressuring Yahoo to accept a $44.6 billion cash and stock offer or face a hostile takeover effort. "This is why Google likes the Microsoft-Yahoo wrestling match, because it can move forward while its rivals are occupied," Enderle said. Google and Salesforce made their first SaaS alliance last year, triggering speculation that the internet search king might buy the fast-growing firm founded by former Oracle executive Marc Benioff in 1999.

The expanded alliance allows third-party developers to customise the applications and creates the world's largest cloud computing platform for building and running applications, according to both firms.

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