Microsoft took its Office software into the Internet "cloud" on Tuesday, moving the suite of popular business tools online amid budding competition from Google's Web-based products.

Microsoft chief executive Steve Ballmer presided over an event here for the global launch of Office 365, which the US software giant released in beta, or test, mode in October.

Ballmer said Office 365 is "where Microsoft Office meets the cloud" and is designed for "any business of any size."

Office 365 joins Microsoft's SharePoint, Exchange, and Lync programs as Web-hosted services, sparing businesses the expense of buying, installing and maintaining the software on their computers.

Ballmer said Office 365 gives users a host of new opportunities for online collaboration including email, shared documents, instant messaging, video and Web conferencing.

"Great collaboration is critical to business growth," Ballmer said.

"With Office 365 people can stay connected using instant messaging," he said. "They can conduct real-time virtual meetings with co-workers and customers and partners.

"People can work together on files and documents simultaneously."

Office 365 for small businesses or professionals can be set up in as few as 15 minutes and subscriptions cost $6 per user per month.

Software packages tailored to the needs of larger businesses are available for monthly per-user subscriptions ranging from $2 to $27.

While Microsoft dominates the workplace and claims over a billion Office users worldwide, the move to the cloud is seen as a response to the challenge posed by Google and others offering online programs.

Providing Office as an online service also means the business tools will be accessible through the smartphones, tablet computers, laptops and other gadgets used by an increasingly mobile workforce.

Microsoft said more than 200,000 organizations have tested Office 365 since it became available and businesses are "reducing IT costs by up to an estimated 50 percent while boosting productivity."

Google, in a preemptive strike against Office 365 on Monday, published a blog post listing "365 reasons to consider Google Apps."

Among the arguments made by Google Apps product manager Shan Sinha was that Office 365 is "optimized for Windows-based PCs and devices" while Google Apps are "designed to work well on any device, on any operating system."

"You can't just take legacy, desktop software, move some of it to a data center and call it 'cloud,'" Sinha said. "(Google) Apps was born for the Web."

Google Apps are free to individual users while businesses are charged 50 dollars per user per year.

Office 365 comes a year after the release of the latest version of Office.

Office 2010 features updates to the ubiquitous spreadsheet, email, presentation and word processing programs used by tens of millions of businesses: Excel, Outlook, PowerPoint and Word.

Office 2010 also offers Office Web Apps -- online versions of Microsoft's most popular products which work directly in a Web browser and are hosted on servers instead of on personal computers.