Microsoft is currently ramping up its extremely profitable Office 2010 updates but it may run into some competition it hasn’t had to face since the Wordperfect/Lotus 123 era.  Google offers its Docs service as part of its online Apps suite for $50/user/year.

In a blog post titled ‘Upgrade here‘, Google’s Enterprise Blog presents a very compelling argument that should not only appeal to the CIO, but it should certainly get the attention of the CFO as well.

While many organizations will get upgrade pricing/discounts from Microsoft (MSFT), the list price of Office Professional 2010 is $499, that is ten times the per year cost of Google’s Apps suite with includes messaging, video hosting and many other features.  That is also before you add Client Access Licenses (CALs) for Microsoft SharePoint Servers (additional hardware/maintenence costs) that are required for the collaborative functionality of Microsoft’s product.

Microsoft offers its Office Live service as part of its ‘Software plus Services’ strategy, free for small business but they require that you purchase Office and charge additional fees for larger organizations.

Google (GOOG) lays out the comparison chart below:

You’ll notice that Google counters much of what Sharepoint does with a product they’ve recently picked up called DocVerse.  Google DocVerse works as a plugin with Office 2003 and 2007,   demonstrated in the video below. It is currently in closed Beta.

[youtube=http://www.youtube.com/watch?v=qSfNQ0WeHXE]

The biggest hurdle facing Google in its attempt to woo potential Microsoft Office upgraders is the general aversion to change.  People are used to working with offline Office applications and are used to many of the features that aren’t included with Google Docs, at least yet.

Additionally, businesses and IT departments don’t necessarily trust the Cloud with all of their important documents.  While Google has an incredible amount of safeguards and redundancy in place, nothing really trumps complete control of servers located on-premise in the hearts and minds of users.

As more and more of our lives move to the Cloud, however, and we start to understand that Cloud vendors like Google (and Microsoft!) are better at storing our data than the local IT guys are, the idea of moving data into the cloud becomes more palatable.

At the end of the day, the best way to compare between Microsoft and Google’s offerings, of course, is to try them out.

You can try Google Apps for free here and download Microsoft Office 2010 beta test drive here.