GOOGLE HAS confirmed that it will launch free spreadsheet and word-processing software online and take on Microsoft in one of its biggest markets.

Under the deal, Google will allow web users to access Sun's OpenOffice from a toolbar.

The other day, when Sun's Scott McNealy and his former employee now Google chief Eric Schmidt met up, Sun was wary about doing that.

When asked point blank, McNealy said it was something to be investigated. However Sun's Australian spokesman Paul O'Connor was a little more forthright about the deal which he said was "huge".

He bubbled that the deal was a wake-up call for Microsoft.

"At the moment most people are used to having to pay for software packages, but at the end of the day, the value is in the content and services – not in the software itself," he said.