Microsoft is to step up the competition with Google this week with web-based versions of some of its key software products.
The move comes within a week of Google's announcement it is to develop a rival operating system.
Google's Chrome OS is designed to target weaknesses in Microsoft's Windows operating system by being fast, secure, lightweight and optimised for the web.
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Microsoft's counter move into Google's domain of internet services will be revealed at this week's annual partner conference in New Orleans, according to the Financial Times.
Microsoft is widely expected to release a stripped-down version of its Office suite online, to rival Google Apps
The next version of Microsoft's Office suite of applications is due early in 2010.
Microsoft is also expected to release details this week about pricing and launch plans for its Azure cloud computing platform .
Analysts believe Azure could see Microsoft jump ahead of Google in selling computing resources over the internet.