Office, Vista changed in wake of Adobe threat

Microsoft said earlier Friday that it expects an antitrust suit from Adobe after months of negotiations in which the companies failed to reach an accord.

The software maker is unilaterally making changes to both Office 2007 and Windows Vista in an effort to assuage some of Adobe's concerns. More important, the move is an attempt to lower the chances that an injunction could stop Microsoft from shipping those products.

"We don't want anything to stand in the way of customers getting their hands on the product," Microsoft Vice President Chris Capossela told CNET News.com in a telephone interview on Friday. "We certainly are trying to be a good partner here."

Microsoft has already had to delay the release date for Windows Vista several times because of technological hurdles. The current plan is to finish development of Office in October, and Vista by November, in order to have a mainstream launch of the products in January.

The company is making two main changes. With Vista, it plans to give computer makers the option of dropping some support for XPS, Microsoft's fixed-format document type that some have characterized as a PDF-killer. Under the changes, Microsoft will still use XPS under the hood to help the operating system print files. But computer makers won't have to include the software that allows users to view XPS files or to save documents as XPS files.

That said, Microsoft doesn't expect many computer makers will choose that option.

"We think it will be rare, because there is value and customers want it," group program manager Andy Simonds told CNET News.com. History may be on Microsoft's side here. The company was ordered by the European Union to offer a version of Windows without a built-in media player. However, manufacturers have shown little or no interest in selling PCs based on the stripped-down operating system.

On the Office side, Microsoft plans to take out of Office 2007 a feature that allows documents to be saved in either XPS or PDF formats. However, consumers will be able to go to Microsoft's Web site and download a patch that will add those capabilities back in.

If customers do that, it will essentially make Office 2007 work the same way as it has in current test versions, including the Beta 2 release that Microsoft made publicly available last week.

Customers will have to go through extra work, though, as they need to both download code and install it before adding back the options.

"It's clearly not as customer-friendly as we would like it to be," Capossela said. Microsoft announced plans for the PDF-saving option in October.

Even if customers don't download the add-on for Office, those running Vista may still be able to save their documents in the XPS format, provided their computer maker has not stripped out Vista's own XPS abilities. In Vista, the print driver can save all files in the XPS format.

Forrester analyst Kyle McNabb said that Microsoft's move to make PDF saving an add-on to Office 2007 won't be a major blow to the new software. "Having to download it and add it will not kill Office 2007," McNabb said. Consumers "will be disappointed, yes, but it won't prevent Office 2007 from moving forward."

Simonds, whose unit develops XPS, said that customers want the fixed document type and doesn't see the additional hurdles hurting XPS' ability to become a universal file format. "We think that value will sort of transcend any of this," he said.

But it will be an added hurdle, Capossela acknowledged. "Clearly, it introduces a barrier, in that customers have to go through another step to make this capability possible," he said.

Adobe developed PDF but has made much of its core technology an open standard. It offers its own PDF reader software for free, while charging for the Acrobat software that creates PDF files. Microsoft maintains that its plan to incorporate a PDF-saving option was on solid legal ground, noting that rivals such as Corel and Sun Microsystems already include such options in their office software products.

McNabb said that regardless of the latest moves, PDF is still the dominant player in the market.

"There is more demand for PDF than XPS," McNabb said. "Even if Microsoft makes XPS free and native (to Office) and users have to download PDF, it will only have a marginal impact on XPS adoption. The market wants PDF."

CNET News.com's Dawn Kawamoto contributed to this report.