Microsoft Readies New Office BetaMicrosoft Readies New Office Beta

The next version of Microsoft's Office suite, now tagged with the moniker Office 11, will likely be known as Office 2003 when it goes into its second beta next month, sources such as the Web site BetaNews report.

Microsoft is also reprising moves seen in earlier editions of Office by making the newest beta, dubbed Beta 2, available to the public. Microsoft won't confirm prices for the Office Beta 2 Kit, but if the company follows past policy, expect it to be priced at $20--what Microsoft charged early adopters for the Office XP public beta two years ago. Those eager for the kit can sign up for notification of its impending availability at a form on the Microsoft Web site.

"I'm certain that they'll call it something else" besides Office 11, says Paul DeGroot, a senior analyst with Directions on Microsoft. "Although I haven't seen anything specific about a name, if Office fits the current pattern of other products, such as Windows Server, it will be called Office 2003."

It will almost definitely not carry the once-lauded .Net name, DeGroot says, because Microsoft is moving away from using the .Net name in products. He cites the example of Windows Server 2003, the next-generation server software scheduled for release this spring, which until last month was called Windows .Net Server 2003.

"The .Net brand has been, shall we say, problematic for Microsoft," DeGroot says.

Whatever it's called, the next version of Office will be hard-pressed to convince current Office users to upgrade.

As much as 40% of Office's current installed base is still using Office 97, DeGroot says, and although there are some enticing features in the upcoming Office for some users, overall he characterizes it as a modest upgrade.

"If there were some specific, dynamite new features we would have heard about them by now. It looks like there aren't any SmartTag or Task Pane-like changes to this version," he says, alluding to features introduced in Office XP, the latest edition.

Another barrier to upgrading, particularly among small businesses and consumers, is the product-activation feature, which debuted in Office XP and also appears in the initial beta of Office 11.

"There were a lot of folks who didn't buy XP because they didn't see anything persuasive enough to 'go legal.'" He doesn't see that changing with the newest edition of Office.

If the next Office is released to lackluster enthusiasm, it will only be a continuation of the trend that started with Office XP. And that would affect Microsoft's bottom line.

"If you look at the financial numbers comparing Office 2000 with Office XP, there's quite a startling difference. After Office 2000 came out, there was a very large spike in the revenue numbers. After XP came out, it was just a polite little knock on the financials," DeGroot says.

To combat this trend, DeGroot sees several options for Microsoft. It can extend the Office franchise, he notes, "by making the desktop bigger, adding more pieces, as they're doing by talking about OneNote and Xdocs" InfoPath, two Office family products that Microsoft won't yet commit to, being included in the final version of Office.

Or Microsoft could push Office's server angle and evolve the product as it has Microsoft Project, which began as a desktop-only client but then morphed into an associated server product. DeGroot thinks the best bet here is with SharePoint Team Services, the collaborative online workspace introduced in Office XP.

The root of the problem is Microsoft's tradition of releasing a new version of Office every two years. Better, he says, if the company recognizes that many people are skipping upgrades, as in the case of Office XP, and changes to a three-year plan.

"It's probably a much more reasonable upgrade cycle for Office," DeGroot says. "It's time for the Office team to say, 'Let's define the benefits that will get people to upgrade,' and then schedule the next release around when they can deliver those features. That would be a lot smarter."

Microsoft, which only says that the Beta 2 of Office will release "in the first quarter of 2003," according to a company spokesperson, says it's on track for a mid-2003 release of Office. Not everyone outside Microsoft is so sure.

"Compared to the Office XP schedule, Microsoft is behind," DeGroot says. If this Office does follow XP's schedule, it might not appear until fall, well after any interpretation of "mid-2003."