Google is making an initial overt move into office productivity software, starting with a package of web-based programs for email, scheduling and communications.

Google has created a software suite based on several programs it already offers separately, in what is being viewed as an official challenge to Microsoft, writes Reuters. The software - Google Apps for Your Domain - is ad-supported and targets small businesses, universities and nonprofits. Google will host the applications, so there is no need to install and maintain software on PCs.

"Now you can offer private-labeled email, IM and calendar tools to all of your users for free, so they can share ideas and get things done more effectively…. It's all hosted by Google, so there's no hardware or software for you to install or maintain," according to the Google Apps site.

Initial apps are Gmail, Google Talk instant-message and web phone service, Google Calendar, and Google Page Creator for web publishing. The Writely word processor and Google Spreadsheet will likely be included as well.

Google said later this year it would offer a "paid, premium" version with the option of being ad-free and allowing more administrative control for larger corporations and government agencies.

An excellent piece in InformationWeek offers more details and analysis of the office software battle brewing between Microsoft and Google.