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Commentary: Microsoft opens up

With a test version of Office 11, the software maker takes a huge risk by giving up control of file formats and data feeds. The move could lead to a new era of competition.

Commentary: Microsoft opens up
By Forrester Research
Special to CNET
October 22, 2002, 9:00AM PT

By Ted Schadler, Group Director

In 2003, Microsoft will introduce a new desktop application called XDocs and ship XML-enabled Word and Excel applications. These products will break the reliance on proprietary formats and finally make it easy for companies to link documents to corporate data and processes.

The software maker on Tuesday announced Office 11 and introduced XDocs; both are currently in the beta test stage and will ship next year. Forrester spoke with John Vail and Gytis Barzdukas, Microsoft group product managers, to learn more. Their demos showed us how:

• Word and Excel look with an XML (Extensible Markup Language) overhaul. The two applications--but not PowerPoint--will depart from 10 years of proprietary technology by adopting XML-based file formats, data feeds and templates. This simple shift will do much to unlock the information trapped in documents on desktops.

• XDocs powers document-based business forms. XDocs is a new application with a Word-like user interface and tools that make it easy for a template designer to build business forms. The twist? These business forms are 100 percent XML and link through Web services to back-end data and processes.

Documents come alive
Forrester applauds Microsoft's willingness to open up Office and make the transition from a proprietary file format and data-access technology to completely open, XML-based files, templates and data access. This simple shift turns a dead document that is static and unconnected into a live document that links to databases, connects to business processes and participates in collaborative activities. It also opens up a world of possibilities to build document interfaces to corporate data and processes. Office 11 will let companies:

• Structure unstructured content. XML file and template formats transform dead files into live documents that can be searched, cataloged and shared--from any application. For example, an XML-based Word document with predefined fields can be stored in a database, submitted for approval and tagged as being of high priority.

• Integrate documents into processes. Office 11 uses Web services to link documents to databases or business processes. With this technology, an XDocs sales report could be prefilled with customer data and submitted to a sales manager for approval, which then would automatically trigger an update to the sales database.

• Deliver data analysis to the masses. Excel 11 replaces Office XP's clunky smart tags with native Web services data feeds, making it an attractive analysis and presentation tool for corporate data. A sales manager can finally use Excel to analyze the sales pipeline with a live data feed from Siebel.

• Present documents in different ways for different purposes. With Office 11, Microsoft has broken the direct link between information and its presentation. That means that data layout can be tailored easily for different audiences. A salesperson, sales manager and field rep will be able to use different templates to view the same sales call information in different ways.

Microsoft's huge risk
Why would Microsoft, which has built a $9 billion business using a proprietary file format and a standalone document model, open up both the file format and the links to data? The software maker's risk in giving up control of the file formats and data feeds is huge. But three sizable forces compel Redmond to open up:

1. The company believes it will help to double the Office franchise. Microsoft Group Vice President Jeff Raikes has taken control of the Office business with the goal of growing it to $20 billion by 2010. The only way to do this is to convince buyers to use documents and spreadsheets in new ways.

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With a test version of Office 11,
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2. Open standards are the price of entry to corporate coffers. The software industry is maturing into a standards-based industry. Companies are demanding that vendors make it easier to tie applications and platforms together using open standards like XML, SOAP (Simple Object Access Protocol) and WSDL (Web Services Description Language). Forrester believes that IBM asked Microsoft to use XML for the native formats and links in Office as part of IBM's strategy to open up software communication using Web services.

3. The U.S. Department of Justice is watching. Microsoft is properly paranoid about charges of anti-competitive behavior. If it had retained a proprietary file format and created a proprietary link between Office and its servers, the charges might stick. But with XML file formats and data links, the competition is wide open.

A new era of competition
Office has been stagnant for five years. No longer. Office 11 will turn dead documents into live documents that make the desktop--and the servers that fuel it--a hotbed for innovation. Keep your eyes peeled for:

• Cheap Office clones--and a compelling reason for Linux on the desktop. The most obvious risk to Microsoft is a Windows-based Office clone such as Sun's StarOffice or ThinkFree Office. But a bigger risk is that an open source group like or a Linux desktop like Ximian will popularize a Linux version of Office and help propel Linux onto the desktop--and displace Windows.

• Prepackaged interactive business documents. Look for business application vendors like Siebel and PeopleSoft to extend their portal interfaces by offering a library of interactive documents and Web services links to their systems.

• New development tools and servers. Microsoft's tools for linking Office 11 to data and processes are primitive. What's needed is a set of tools and servers that make it easier to build schemas and templates, register and implement security policies, and turn documents into a front end for applications. Microsoft will build these eventually, but a player like IBM or a courageous start-up like Juice Software will jump into the gap.

• Portals to gain a document interface. Portals already do much of the heavy lifting required to tap corporate data from multiple systems, secure access and personalize the presentation. Portal vendors like Epicentric, IBM and Plumtree Software will add features to support interactive documents as part of the portal architecture.

• Content management vendors to embrace Office for content creation. What's the No. 1 complaint about content management tools? Poor usability for content authoring. Office 11 will let content management system veterans like Documentum, Stellent and Interwoven use Word or XDocs as the user interface for creating common content and forms.

© 2002, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.