Microsoft released the latest update to its popular Office software on Wednesday including a Web-hosted version aimed at countering competition from emerging "cloud" products offered by Google.

Office 2010, which was unveiled at a launch event here, features updates to the ubiquitous spreadsheet, email, presentation and word processing programs used by tens of millions of businesses: Excel, Outlook, PowerPoint and Word.

For the new version of Office, the first since 2007, Microsoft is offering Office Web Apps - online versions of its most popular products which work directly in a Web browser and are hosted on servers in the "cloud" instead of on personal computers.

While Microsoft dominates the workplace and claims over 500 million Office users worldwide, the move is seen as a response to the challenge posed by Google and others offering free online cloud-computing programs.

Microsoft engineering leader Antoine Leblond said Office 2010 offers "a productivity solution that allows (people) to work - in whatever capacity - from wherever they are.

"People today are working differently than a few years ago and expect their software to work the way they do," Leblond said, citing "collaboration, social networks, mobility (and) use of multi-media in documents."

"So what businesses are getting are productivity tools that allow them to adapt to these various market trends including things like the move to the cloud on their own terms," he said in a statement.

Stephen Elop, president of Microsoft's Business Division, said that "with the 2010 set of products, organizations will save, innovate and grow as their people benefit from working across the PC, phone and browser."

Elop, who presided over the Office 2010 launch event here, said a beta, or test, version of Office 2010 has been downloaded by some 8.6 million users.

The top-of-the-line version of Office costs 499 dollars while others are priced at 99 dollars and 149 dollars. Google Apps are free to individual users while businesses are charged 50 dollars per user per year.

Microsoft said Office 2010 was available on Wednesday in 14 languages and would be available in 94 languages over the next few months.

Google, meanwhile, fired a shot directly across Microsoft's bow with a blog post urging people who are "considering upgrading Office with Office" to "consider an alternative: upgrading Office with Google Docs."

"Google Docs has been providing rich real-time collaboration to millions of users for nearly four years," said Matthew Glotzbach, Google's enterprise product management director.

"It lets employees edit and share documents, spreadsheets, and presentations in the browser from anywhere in the world," he said. "Google Docs represents a real alternative for companies: a chance to get the collaboration features you need today and end the endless cycle of 'upgrades.'"

Alex Payne, director of Microsoft's online product management team, rejected Google's claim saying "the argument that 'Google Docs will make Office' better is simply not true.

"An organization that figures out all these issues after the fact could incur quite a bit of 'cost' to learn this painfully," Payne said.