Service Pack 1, a 17MB download, is supposed to enhance Office XP's performance, security and stability, while fixing a wide range of glitches, Microsoft said. The download for system administrators, which includes additional tools, is 40MB. Both files are expected to be posted to Microsoft's Web site later on Thursday.
The service pack also consolidates other separately released enhancements and fixes, such as Outlook 2002 security updates.
Microsoft regularly releases consolidated bug-fix updates for its products. Office 2000, for example, is currently at Service Pack 2. Microsoft issued the second major update to Windows 2000 in May.
The release of the first service pack typically signals to businesses that the product is ready for prime time.
"Service Pack 1 is always a milestone for any product, certainly Office XP, especially as a lot of enterprises accelerate Windows 2000/XP deployments into next year," Gartner analyst Michael Silver said. "Doing both of those deployments at once adds some efficiencies to the process."
David Jaffe, Office XP lead product manager, said Microsoft hopes the service pack release will help nudge companies to install the software. "We see this as a key driver for organizations that recently purchased Windows XP and Office XP that haven't deployed yet."
The security fixes close vulnerabilities that would allow hackers to run malicious code in Word, Excel and PowerPoint. Another security patch prevents hackers from remotely manipulating files or data.
The service pack resolves a problem with Outlook not notifying users when their main data file had reached its size limit. It also handles problems sending e-mail when instant messaging is running and crashes caused when using custom bullets in PowerPoint.
Office XP's "Error Reporting" tool proved instrumental in developing bug fixes, Jaffe said. Microsoft also uses the tool in other products, such as Internet Explorer and Windows XP, to collect data following a program's crash. Following a crash, people are prompted to send an error report to Microsoft, a feature that can be overridden.
Push comes to shove
While the news and recent hype from Microsoft has been all about Windows XP, from a cash perspective Office is the more important product for the company. The product accounts for more than 40 percent of Microsoft's income, according to the company.
But Microsoft has had a tough time getting businesses to upgrade as frequently as the company wants. Many businesses only make the switch about every other version of Office--or every three to four years--versus the two years Microsoft recommends.
In fact, a recent survey conducted by Windows integrator Sunbelt Software and market analysts Giga found the majority of the 4,550 technology professionals were waiting four years or more to upgrade Office versions.
"Over 70 percent of users are still on Office 97, based on a recent, unscientific survey that we did of our clients," Silver said.
Microsoft puts the figure closer to 60 percent for Office 95 and 97 combined.
Microsoft responded to slow upgrades in May by unveiling a controversial new licensing program that raised customers' costs anywhere from 33 percent to 107 percent, according to Gartner. But to qualify for the new program, customers had to move to Office XP by Oct. 1 or risk losing volume discounts on their next upgrade.
At the time, Microsoft had not officially released the product, so technically all businesses subscribing to one of the company's volume licensing programs would have been compelled to consider making the upgrade in just under six months.
"Absolutely, one of the things that certainly helped Microsoft get Office XP out were the changes they made in licensing," Silver said.
Silver predicted many businesses using Office 97 would make the upgrade to XP before July 31 "because they will pay a lot less when they upgrade in the future. That's going to help Microsoft a lot to get Office XP out."
While Microsoft pressures businesses to upgrade more often, the company is also attempting to entice students to buy the software.
Since late October, Microsoft has offered a reduced-cost, full academic version of Office XP Standard through major retailers, such as Staples, Target and Wal-Mart, among others, for $149.
Costco sells the academic version for less, $129. The same "nonacademic" Office XP Standard version costs $439 at Costco. Costco and other retailers sell the two versions side by side, making it easy for nonstudents to pick up a copy.
"We definitely don't have somebody checking at every store to prove that you're a student," Jaffe said. But as a deterrent to piracy, "There are no upgrade rights going from Office XP for Students and Teachers" to the Standard version of Office.
Until this promotion, Microsoft largely sold heavily discounted academic versions of Office through college dealers or bookstores.
"But that really only addressed higher-education students," Jaffe said. "There were K-12 students that used Office constantly at school, so we wanted to make it affordable for home."
While the program is new in the United States, Microsoft has offered academic versions through major retailers in England, France and Germany for some time.
Any student, including kindergarten through grade 12 or those being home schooled, qualify for the discount.
Technically, parents of students are prohibited from using the product other than to help their children, but that's something not realistically enforceable, Silver said.
"If Microsoft seeds and gets students locked on Office, because of the file formats, when they're young it gives them a pretty good revenue stream going forward," Silver said. "Apple was pretty successful at that a while back, and I think Microsoft has learned how good a strategy that is."