As if replying to Eric Schmidt’s prediction of the imminent demise of desktop software, Microsoft’s Antoine Leblond pooh-poohs the threat in a new Reuters interview:

Leblond, who became co-leader of the Office group in June, said Google was the latest in a long line of challengers to the Office software suite … “The simple argument that ‘this is good enough for 90 percent of what we do’ has fallen on its face over and over and over again,” Leblond told Reuters in an interview on Tuesday. “When it comes to mission critical things and key pieces of how people run their businesses, the threshold is higher.”

Leblond continues with his defense of what he terms “old school” applications:

“Free software has an appealing ring to it, but free software has been around for a while now and it turns out free doesn’t trump the software doing what people need it to do,” said Leblond, a 17-year veteran of the Office team. Microsoft’s new Office Live is an example of its “software plus services” approach. It lets small businesses set up Web sites, company-branded e-mail and Web applications to allow project management and collaboration. It works with Office but the programs are largely different from those familiar to desktop PC users.

The lines are drawn. It’s Old School versus New School in Office War 2007.