A top Microsoft executive defended desktop application software, the source of the company's revenue for three decades, arguing on Tuesday that even services-based companies, such as Google, still need it.

The comments by Jeff Raikes, president of Microsoft's business applications division, come as Microsoft is trying to position itself as a company capable of delivering applications over the Internet as well as on PCs, its traditional distribution model.

"It's interesting some our competitors who like to espouse the idea that software is dead," Raikes said. "I think they're worried that actually people like a lot of what they have at their fingertips and the real success is to use a combination."

Microsoft has come under increasing pressure from companies such as Salesforce.com, which specializes in Web-based CRM applications and Google, whose Docs suite is an online alternative to Microsoft's Office suite. Web-based applications tend to be cheaper, easier to update and require little installation since applications are delivered through a Web browser.

The IDG News Service is a Network World affiliate.