Office XP to ship just under the wire

Analyst test drives Office XP Chris LeTocq, analyst, Gartner

Office XP--Microsoft's flagship suite of productivity applications--not only plays a critical part in the company's product lineup this year, but is seen as a catalyst for Microsoft's .Net software-as-a-service strategy. Still, the company will have a battle convincing many customers to upgrade, analysts say.

Microsoft representatives did not return a call seeking comment on the Office XP release schedule.

Microsoft could release the final Office XP product to manufacturers any time over the next several days, sources said. The ActiveWin Windows enthusiast Web site reported that Microsoft's French public relations agency, Grayling, has said Microsoft will release Office XP on March 9 to manufacturers.

Microsoft's corporate customers that buy the product in volume under the Microsoft Select program could have Office XP CDs in hand by mid-April, sources said. Retailers are likely to begin stocking Office XP on shelves concurrent with the May 31 launch.

The software maker is pushing aggressively ahead with Office XP, a product that the company's top executives--from Chairman Bill Gates on down--have christened as one of the most important Microsoft product launches slated for this year. The other is Windows XP, the next version of Windows, which Microsoft has said will ship before the end of 2001.

The company shipped the first beta, or test, version of Office XP, formerly known as Office 10, in August. On Wednesday, Microsoft made available a Corporate Preview Program release of Office XP to as many as 500,000 corporate testers willing to pay $19.95 for the beta.

Many Microsoft watchers consider the Corporate Preview release to be the so-called Release Candidate 1 of Office XP. A release candidate, in Microsoft parlance, is a near-final test version. Usually, Microsoft issues multiple release candidates of a product before sending it to manufacturers. Once Microsoft releases a product to manufacturers, it provides PC makers interested in preloading the software with a CD they can use as a master copy for testing and burning purposes.

Microsoft's biggest Office XP challenge will be to convince customers that the product encompasses enough new features and functionality to merit the pain and cost of upgrading, Gartner analyst Chris LeTocq said.

"Historically, we tell our customers they should upgrade only every other version of Office," LeTocq said. "Upgrading is an expensive business."

LeTocq said the group of existing Microsoft customers most likely to upgrade are those currently running Office 97. But even some of these customers might be tough to convince, he added.

For many Office 97 customers, he said, the 4-year-old version of Office works just fine. And given the fact that much desktop PC software spending is pegged to hardware spending and upgrades, some customers may not be willing to upgrade to the latest version of Office during tough financial times, LeTocq said.

Microsoft has said Office XP will be a stepping-stone to the company's realization of its .Net software-as-a-service strategy. Office XP will include improvements in productivity and collaboration, Microsoft executives have said. The product will feature integration with Microsoft's MSN instant messaging and Hotmail Web-based e-mail service, as well as other hosted Office services, according to the company.

Office XP is slated to work on Windows 98/98 SE, Windows Millennium Edition, NT 4.0, Windows 2000 and Windows XP. It will not run on Windows 95, company executives have said.