Google’s small but growing enterprise app business is now going for Microsoft’s jugular. At a press conference today (see Mike’s real-time notes), Google announced a new plug-in that will sync Google’s enterprise versions of Gmail, contacts, and calendar with Microsoft’s Outlook. In the enterprise, Outlook is still king and not everyone is ready to switch just yet to browser-based email, calendars and contact management.

So employees can continue to use Outlook if that is what they are comfortable with, and Google Apps will run on the backend. Google is claiming that its enterprise apps cost less than half of Microsoft Exchange (the server software that is paired with Outlook, where all the money is). The new syncing tool, Google App Sync, works only on Windows at this point and is only available for (paying) enterprise customers.

Steve Ballmer is not going to be happy about this.