Microsoft said the software, now codenamed Office 11, will be called Microsoft Office 2003. It is slated for final release this summer, said Simon Marks, Microsoft Office product manager.
But the biggest changes aren't in the standard word-processing, spreadsheet and other business applications that people have come to associate with "Office." Rather, Microsoft has developed two new software programs and is shifting how it markets
Office. Instead of touting individual applications or the traditional "Office suite," Microsoft is billing Office as an integrated system of software and services.
The company said it has not yet determined a price for Office 2003.
"We see [Office 2003] as a bit of a shift in terms of Microsoft's strategy," said Michael Silver, vice president and research director of Gartner Inc. "They want to make sure that Office is less of a commodity. This version is really designed for businesses to integrate Office more into the fiber of their business."
The version being released Monday, Microsoft's second beta, includes new applications, called OneNote and InfoPath. OneNote allows users to type or handwrite notes with search and organizing functions. InfoPath allows organizations to automatically enter, collect and use data in a variety of applications.
Office also includes a new version of Microsoft's SharePoint technology, in which workers can collaborate on projects. For example, instant-messaging functions are incorporated into various programs and users can automatically receive and work off the latest versions of a shared document.
Office will also incorporate "rights management" technology, which will allow companies to restrict users from forwarding, printing and even cutting and pasting elements from e-mails or documents it deems sensitive. The technology, announced earlier this month, has raised alarm among some who say such restrictions could shut down whistleblowers' efforts to expose corporate fraud.
The key to Office is the use of XML technology, a programming standard that acts as a universal translator, allowing computers to share information regardless of application or language.
Microsoft believes XML-based programs can help companies retrieve and use data, wherever it might be within the corporate network, Marks said. For example, a sales figure in an Excel spreadsheet file can be automatically scooped out and used to update a Microsoft Word report on monthly sales.
Microsoft's Office upgrade comes as vendors including IBM and Sun Microsystems are aggressively seeking to pick off Microsoft customers, many of whom were angered by a new licensing program Microsoft adopted last year. That subscription-like program, called Software Assurance, required companies and agencies to sign multiyear contracts to receive upgrades or face significant costs when they do decide to upgrade.
Sun offers a suite called StarOffice for Windows that is designed to compete with Microsoft's Office and sells for less.
Office 2003 will run only on Microsoft's most recent operating systems -- Windows 2000 (with Service Pack 3 installed) and Windows XP.
Despite grumbling from businesses, Silver said he expects companies may be ready to upgrade software and older hardware in 18 months or so, he said.
But some of the new software isn't necessarily easy to use, and InfoPath, despite its promise, may be too complex for many to take advantage of, analysts said.
"InfoPath is a powerful tool," said Ken Smiley, an analyst with Forrester Research. "It's going to go right over the heads of a lot of enterprises initially. They won't initially grasp what it is capable of doing."
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