Microsoft Corp and Nokia announced an alliance on Wednesday to bring advanced business software to smartphones in a bid to counter the dominance of Research in Motion Ltd's Blackberry device.

The alliance between the world's largest software firm and the largest cellphone maker means the latest online versions of Microsoft's Office suite of applications, including Word, Excel and PowerPoint, will be available on a range of Nokia handheld devices.

The two companies, at one time fierce rivals in the mobile telecommunications business, expect to offer Nokia phones running Office sometime next year, targeting the lucrative market for business users.

This is giving some of our competitors -- let's spell it out, RIM -- a run for their money, said Nokia executive vice president Robert Andersson, in a telephone interview.

I don't think BlackBerry has seen the kind of competition we can provide them now.

The alliance may also counter Google Inc's recent move into free online software, which has been targeted at Microsoft's business customers.

(Reporting by Bill Rigby in Seattle and Tarmo Virki in Helsinki, editing by Gerald E. McCormick)

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