A pack of upcoming software programs expected to be announced Friday by Google is viewed as fundamental to the company's vision. And that's bad news for Microsoft, says one Google watcher.

While the software programs scheduled for announcement by Google at CES in Las Vegas Friday aren't particularly new, the mode of delivery--a single installer for the entire package--is viewed as fundamental to the company's vision.

Noting that Google seems to be avoiding popular office software functions such as word processing, technology analyst Steve Arnold, of Arnold IT, said Google is targeting utility software first, in a move that complements its plans for its Googleplex, a server-based interconnected massive network.

"By doing utility functions first, if it works, we'll all be doing everything off of Google," Arnold said in an interview Thursday. "We're seeing the shift from Microsoft to Google. Just look--Bill Gates is talking about Vista [coming] in a few months. The Google [announcement] is for stuff today."

The Wall Street Journal reported Thursday that the search firm plans to unveil its Google Pack of software that will include Adobe Reader, Lavasoft's Ad-Aware, RealNetworks' RealPlayer, Symantec anti-virus software and instant messaging software from Trillian. The package will likely include Google's search software and its Picasa image management application, Google Talk IM, and Google mapping software.

What about the rumored Google PC?

"I think we'll be in a state of uncertainty for 6 to 9 months on this," said Arnold, who says he has been getting different answers from his sources within and without Google. He noted that Wyse Technology, manufacturer of thin client devices, has said it has examined the possibility of producing a Google-branded $200 network computer, for use in the Googleplex. "I'm getting mixed signals on this [PC or thin client]. That usually means something is going on."

Last month, John Kish, Wyse's chief executive, told the New York Times: "Google is on a path to developing a stack of software in competition with the Microsoft desktop, and one that is much more network-centric, more an Internet service."

The heavy media coverage of Google hasn't gone unnoticed by Microsoft chairman Bill Gates. At CES this week, Gates was asked whether Google represented Microsoft's most formidable threat in 30 years" "No," said Gates, according to the Reuters news service. "The biggest company in the computer industry by far is IBM. They have four times the employees that I have, way more revenues that I have. IBM has always been our biggest competitor. The press just doesn't like to write about IBM."

Arnold, who has authored a book on Google entitled "The Google Legacy," said the Google Pack concept fits neatly into Google's idea of the Googleplex. You won't need a CD for your software," he said. "You'll just need a little bit of software on your machine and a lot on the Googleplex."

The analyst said Google's approach gives it a price advantage over Microsoft. He added that financial scenarios range from a 40-percent to a four- times advantage. "Google is doing to Microsoft what Microsoft did to IBM 20 years ago," Arnold said.