Excessive amount of 'Google should be worried' threads :)
I'd hate to add to them, but since there's already like 4, this one won't do any harm :)
I understand people are thrilled by many of Microsoft's announcements at build and expect to see the company make a bigger impact on the consumer mobile and services market. But I wouldn't go as far as saying Google should be shaking in their boots just yet.
For the most part, progress in this new 'post iphone' industry has 'normalised' and is most often incremental and predictable, that is, nobody suddenly leaps over someone else. Sure, technologies like universal apps, Office spreading in mobile, Cortana and the many services Azure provides are promising, however they are certainly not 'disruptive technologies' and Microsoft needs nothing short of 'revolutionary' if it wishes to close the mindshare and marketshare gap that exists in consumer services and mobile computing at the moment, especially that the company is yet to transform its image in the eyes of the mass consumer market. Heck, even if most of Microsoft's products would be 'genuinely better', they would still need many years to close the gap, because mindshare and marketshare are very hard assets to acquire rapidly without 'disruptive' tools. But Google is not sitting on their ass, if they see anything 'better' and potentially 'disruptive', they will copy/match it long before their marketshare comes under any substantial attack - This is another inherent advantage of being so far in the lead.
Another major problem that comes with having the lesser mindshare and marketshare and that is less user participation and data respectively, which are crucial assets if you want to optimise and improve services and make your products 'genuinely better'. Which is why I believe that even if Microsoft's platforms and engines behind things like Cortana were somehow better, their actual data pool and smaller amount of user sourced data would limit and disadvantage them against Google, especially on an international level, outside the U.S and enterprise, most (Except Outlook, OneDrive) of Microsofts services are simply lacklustre stale abortions and that is just unacceptable in today's shrinking world.
Like I said we are in a 'normalised' progress phase now. Nothing short of 'revolutionary (better won't do)' that Ms releases now will phase Google, as it will certainly innovate itself and copy whatever it deems useful from Microsoft long before the average consumers bats an eyelid. Perhaps if Ms consistently delivers solid products with great deals/discounts it can amass a potent market/mind share by 2018 or so.