Google has welcomed IBM's announcement of a cloud-based on-demand e-mail, calendaring and contact management system.
IBM is charging $12 per user a year for its LotusLive iNotes, compared with Google's $50 for its Google Apps Premier Edition,
In addition to undercutting Google's prices, IBM is hoping to capitalise on business concerns about the service outages that have hit Gmail users, said analysts.
Announcing LotusLive iNotes, IBM said the service is based on technology purchased from the Hong Kong company Outblaze that is secure and reliable.
Although IBM said no company can guarantee 100% uptime for on-demand applications, IBM has a long-standing track record of running "the world's mission-critical systems."
IBM is also hoping to win business from Microsoft customers who are not ready to migrate to Exchange 2010 release.
But Google said IBM still has to prove its reliability and pointed out that Google Apps goes far beyond e-mail, calendaring and contact management.