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Speaking at a SharePoint conference in California, the outgoing Microsoft chairman attacked Google's business credentials. "In terms of Google, not to overstate it, but it really doesn't understand the special needs of business," Gates claimed. "Today, its economic model is based on consumer search. It has done an incredible job there and obviously we're investing in challenging them in that space."

Gates saved his most venomous attack for Google Apps. "If you'd seen what the Google tools that have tried to do productivity type things [do], they really don't have the richness, the responsiveness," he said.

"For most of these Google products, to be frank,

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the day they announce them is their best day."

The Microsoft chairman even singled out specific applications for criticism. "I remember there was one called GTalk. I can barely remember the name but it was so, you know, it was going to change the world, and so you know, it's healthy that there are many choices that people have here."

Online battle

Gates's attack came as Microsoft launched its own online document sharing service, Office Live Workspace. The service allows Office software users to store, share and collaborate on documents online, but unlike Google Docs, Workspace users still need to have the desktop software installed on their PC to create documents.

Google last week added a business website building tool to its suite of online apps, which many critics saw as a direct rival to Microsoft's SharePoint. Google Sites' WYSIWYG editor allows company employees to create intranets, project-management websites or even a public-facing company website without any HTML or web-hosting expertise.