Search engine Google is to let firms run its email, calendar and other services on their own domains, to build on its offerings for individuals.
Analysts says Google's simplicity is a winning virtue
The move places Google, whose focus has been searching and advertising, in direct competition with Microsoft, as it updates its Office package.
Google says it is answering a demand from firms for entire systems rather than individual services.
Later this year, Google will offer a paid-for version of the software.
The price of such a version, which would not hold any advertisements, has yet to be set.
The search giant's initial "Google Apps for Your Domain" service initially offers email, shared online calendars, chat and a rudimentary web page-building system.
It is widely predicted that Google's Office-style online applications - word processor Writely and Google Spreadsheet - will follow.
Google will host the software, a process that is often expensive and time-consuming for firms.
"If we do it right, we get the best of both worlds - very consumer friendly software, but also low-cost business applications," said Dave Girouard, Google's general manager of applications.
Analysts say one of the main virtues of Google over Microsoft has been its user friendly character.
"For all the complexity of Microsoft software and how long Vista has taken, a lot of corporate executives are going to be wary," said Martin Pyykkonen, an analysts at Global Crown Capital.
"Do you update to the complexity of Vista or would you be better off just using something simple like Google Apps (applications)."
But Girouard stressed that Google's latest offering was "not by any means an alternative to Windows", and said the firm was not aiming to "eliminate any applications".
The announcement comes as Google teams up with auction site eBay to offer exclusive advertising, on its international website.
Both firms are planning on combining their so-called "click-to-call" services, which enables consumers to directly phone a firm through its advertisement, via eBay's Skype and Google Talk.