Microsoft delivers new Office beta

With the second beta of Office 2003 expected to be doled out to a record 500,000 users on Monday, Microsoft continues its mission to broaden the suite’s appeal to both corporate and mid-size companies by including three new XML-based applications.

The new beta includes for the first time the company’s One Note and InfoPath, both XML-laced applications that make it easier for users to create and access data between the two as well as among the other Office applications. The beta also features a collection of improved “cross-application” features shared by all members of the desktop suite, including ink support, document and meeting workspaces, a research task pane, and Internet faxing.

But how successful One Note and InfoPath will be in attracting new users or enticing existing ones to upgrade — something Microsoft needs to do to keep the enormous Office revenue stream flowing — remains to be seen, according to some industry observers. Some think many users may not want to climb the learning curve associated with InfoPath, a product that is more for IT administrators than desktop users.

“I think it will take them time to get traction because people have to understand what they are being offered with all this. And part of offering new or different [products] is there is an educational process that has to occur,” said Stephen O’Grady, senior analyst with RedMonk in Hollis, N.H.

OneNote allows desktop, laptop, and Tablet PC users to capture and organize their notes, including handwritten notes. Company officials describe it as a “staging area for preparing thoughts and ideas” before they are shared with others. Microsoft said last week that 30,000 users have already signed up for the beta. InfoPathuses XML to help desktop users pull a wide range of data together from all the Office applications into a single form that, in turn, can automatically update information among multiple applications.

While both applications will be in beta two, company officials continued to say last week that they have not made a decision as to whether they will bundle them into the finished suite, which is expected to be delivered around mid-year.

But O’Grady and others believe the steep learning curve will be worth it to users — and to Microsoft, which needs to keep incorporating new functionality in order to keep the product’s huge installed base of users interested in upgrading. Office accounted for roughly 27 percent of the company’s overall revenue and about 45 percent of its profit in last year’s fourth quarter, according to a consensus among market researchers.

“What they want to do is make Office less of a commodity office automation product and try to get enterprises to build it more into the fiber of the organization. That is where InfoPath and the XML features of Word and Excel come in. They want people to use the data they are creating in Word and Excel and integrate it in with their business apps,” said Michael Silver, a vice president and research director with Gartner Group in Stamford, Conn.

Another new application being included is the Business Contact Manager, an add-on product for Outlook that is being aimed largely at mid-size companies. The product is designed to help users manage business contacts and track sales opportunities.

Wanting to cash in on the rapidly growing small and medium-size markets (SMBs), Microsoft is reportedly considering a version of Office 2003 tailored specifically for SMBs, according to sources familiar with the company’s plans.

“More and more, the smaller companies are looking to produce more professional-looking documents, presentations, and even catalogs. People [at Microsoft] are thinking that this would be a very good idea for Office,” said one source.

Along with delivery of the new Office beta, Microsoft will again attempt to get users and developers focused on what it is now calling Microsoft Office System 2003. This is a strategic concept that aims to tie tightly together Office 2003 and the upcoming Windows Server 2003 with a number of XML-based products and technologies, including Windows SharePoint, information rights management, and intelligent mail management.

Office 2003 should play a particularly key role in this concept, given that a huge amount of corporate data still lives on and has access by desktop systems.

“With about 80 percent of a company’s data accessible from the desktop, and most of it unstructured, we think it is important that we try to better connect people, the data they create, and their business processes. We think we can give them [with Office 2003] better visibility and control of that data,” said Dan Leach, lead product manager of Office 2003, in the company’s Information Worker Product Management Group.

Playing a part in crystallizing the vision of seamless interaction between server and client is the newly named Windows SharePoint Services, which will be built into Windows Server 2003. Through Windows SharePoint, Office 2003 users will be able to set up online server-based collaborative meetings, allowing multiple users to work on a single document at the same time, for instance.

“When you are writing a document and you want to share it with someone else, currently you have to add it to an e-mail and fire it off to someone else to get input. But with Office 2003’s integration with SharePoint, users can check that into the Team Services workspace, where people can come in and check it out and have discussions. People can collaborate around documents more intelligently,” said Michael Sampson, consulting analyst at Ferris Research in San Francisco.

With the incorporation of more XML-based capabilities, along with its Visual Basic Application (VBA) tools, Microsoft is also attempting to get corporate and third-party developers to think of the upcoming suite more as a development environment than just a collection of separate applications. In doing so, Microsoft thinks it will accelerate the development of applications that integrate better with each other on the desktop as well as work seamlessly with Windows and non-Windows-based server applications.

“XML and VBA should open up a lot of new possibilities in terms of how developers can architect their [desktop] apps in order to work with a range of different servers. Users have a lot of data locked up in both Word and Excel and their server apps [that] they will now be able to get at,” said Joe Andreshak, technical product manager in Microsoft’s Information Worker Business Group.