In its latest volley against Google ( GOOG), Microsoft ( MSFT) will roll out a new free version of its Windows desktop search tool for corporate users.

Microsoft will announce the new search tool Tuesday at an annual European IT conference being held this year in Barcelona. The enterprise product builds on a free consumer desktop search tool first unveiled by Microsoft in December. This new enterprise version of Windows desktop search goes farther by enabling IT departments to install, manage and customize the desktop search tool for a company's entire workforce.

Susan Feldman, vice president of content technologies at research firm IDC, says the new enterprise version should address security issues that have led some IT departments to ban workers from using desktop search products and prompted some workers to sidestep their IT administrators and use the products anyway.

"Knowledge workers realize they can't find their stuff, and therefore they have downloaded a variety of search tools, going around their IT administrators usually," says Feldman. But "that can create some significant security holes for an organization."

Part of the reason many workers have taken things into their own hands is that the built-in search tool in the Windows operating system has been so woefully inadequate, taking far longer to scour a computer than a Web search would take.

Google grabbed headlines last year when it beat Microsoft to market with its own desktop search engine that was able to find content across the desktop as fast a Web search, offering a huge improvement over Microsoft's built-in Windows product.

The move by Google led many tech observers to speculate that it had even bigger ambitions to unseat Microsoft's dominance on the desktop with a competing operating system or Office-like products. It also prompted Microsoft to accelerate the launch of its competing desktop product to December. The software behemoth originally had planned to include desktop search in its next operating system, which isn't due out until next year.

But here again, Microsoft is coming to market late. In addition to its desktop search tool for consumers, Google already offers a similar product called the Google Search Appliance for corporate customers.

But unlike Microsoft, Google is charging for it. A two-unit appliance starts at $30,000 to search up to 500,000 documents, according to the company's Web site.

However, Google offers some advantages over Microsoft in that its search tool can scour a wider variety of sources, including Lotus Notes and various databases.

For now, Microsoft's enterprise desktop search tool can search all Microsoft Office documents, spreadsheets, presentations and Outlook email messages, as well as "meta" data such as music and photos, according to Heather Friedland, product planner for Windows desktop search at Microsoft.

But Friedland says Microsoft offers other advantages, including tighter integration with applications such as Outlook and more customization.

Microsoft's new enterprise edition will allow IT managers to customize the search tool so users can switch the scope of their search from their desktop to the Web or a corporate intranet. Enterprise customers also will be able to try a new beta feature that lets users search their desktop within Outlook.

Microsoft also plans to augment desktop search with future offerings in its Windows Live product line -- its latest push on the online software services front. For instance, in the future, desktop search will not only scour Outlook email on a user's computer but also email from Windows Live that resides with Microsoft. That feature will be coming next year, Friedland says.

Microsoft's decision to offer its enterprise desktop search tool at no cost also could pose a problem for other companies currently charging for such products, Feldman acknowledges. IDC estimates enterprise search software represented a $750 million market last year and grew 25% from a year earlier.

The two biggest companies in the enterprise search market, Verity ( VRTY) and Autonomy, are combining to become the No. 1 player. There are also hundreds of smaller companies in what Feldman describes as a "very chaotic market" with lots of merger and acquisition activity.

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