Microsoft rebrands Office for enterprises

Microsoft on Monday plans to rebrand its flagship productivity suite as "Office System," in an attempt to reposition the software as a base on which businesses can custom-build products.

As previously reported, concurrent with the rebranding, Microsoft officially launched Office 2003 Beta 2, which will be available to about a half million beta testers and businesses. Microsoft delivered the software late last week to the 12,000 people who tested Beta 1, which was released in October. Microsoft plans to ship Office System during the summer.

As part of the rebranding, Microsoft is adding Office to the name of the individual applications. For example, Word 2003 would now be called Office Word 2003, or Outlook 2003 would be Office Outlook 2003. Office System represents the brand covering the whole family of products, which includes Office 2003, Publisher and Visio, among other desktop software.

The change, along with widespread support for Extensible Markup Language (XML) throughout the suite, is part of a deliberate effort to focus less on individual applications and more on Office as a "platform" for enterprise development, said Gartner analyst Michael Silver.

"Microsoft wants enterprises to think of Office as more than just horizontal productivity programs," he said.

The rebranding comes as Microsoft looks to give enterprises new reasons to upgrade Office versions, at a time when the software giant is its own worst competitor. Office accounts for more than 90 percent of the productivity suite market, according to analysts' estimates. But many businesses have been slow moving on the upgrades, typically skipping one version or more between upgrades.

According to analysts, the software titan faced significant hurdles getting businesses to move from Office 97 or 2000, to version XP, which Microsoft released in May 2001. In an informal survey conducted in October during Gartner's annual symposium, 31 percent of U.S. IT managers said their companies used Office 97, 56 percent Office 2000, and 6 percent Office XP. At the same time, a significant number of customers opted for the older Office 2000 over the newer XP last year. Office 2000 gained 15 percent market share in 2002, according to Gartner.

Office, along with Windows, is one of Microsoft's two flagship products. In the most recent quarter, Microsoft's Information Worker division, which is largely made up of Office, accounted for $2.4 billion of $8.5 billion in revenue, or about 28 percent. That figure is down from more than 40 percent of revenue a few years ago.

If successful, Microsoft's branding strategy could help "recharge Office sales," Silver said.

Enterprise front end
More than any other Office release, Microsoft has focused on turning the new suite into a single package that can act as a front end to existing customer relationship management (CRM) and enterprise resource planning (ERP) systems. New Office product InfoPath will anchor the CRM and ERP push, although analysts say that Microsoft will position the whole suite as the front end for these applications.

This approach "has the potential of enhancing the value of the Office suite and making it more of a platform that companies can use to put tools that are familiar to end users in their hands," said Jupiter Research analyst David Schatsky.

In a research report released last year, Forrester Research analyst John Dalton gave CRM and ERP clients a failing grade because of serious problems with the software. In one test scenario, a company with 500 agents saw a 20 percent increase in call times rather than the expected 30 percent decrease in call volumes after implementing a new CRM package. The unexpected additional cost: $6 million. Dalton attributed the problem largely to "overwhelming complexity" and "inconsistent interfaces" of the CRM client software.

Office's well-known interface could make the product a more attractive front end for existing CRM and ERP applications, said Forrester Research analyst Ted Schadler. "Microsoft would like nothing more than to make Office the front end to these other (back-end) applications," he said.

Office's widespread use of XML is largely responsible for this front-end enterprise repositioning of Office, analysts say. Using XML, Microsoft wants to move to a more data-centric model, putting less emphasis on individual documents.

"Our focus on Office 2003 is data interchange," said Jean Paoli, Microsoft's XML architect. "For now, there is no difference between documents and data. We finally made those one in the same."

Businesses could use XML to move data throughout their enterprise, with Office as the front-end system. This is a potentially important move for Microsoft, since so much data is generated in Office.

"People think of putting data in a database, when 90 percent of their information is in a document," Paoli said. XML would allow easier interchange of data generated in Office documents with back-end systems or existing Web services.

Office's new role "is to have interoperability with the backend. How useful is it to have a front end that can' talk with the backend?" Paoli said.

Just the Factiva, ma'am
New York-based Factiva is one business that hopes to harness some of Office 2003's XML capabilities. Factiva, a cooperative effort between Dow Jones and Reuters, seeks to bring business news and information to enterprises. Besides content pulled from both news organizations operations, Factiva also offers enterprise consulting and professional services.

"We made the decision during the early stages of the (Office 2003) development effort to build a brand new, XML-based platform?which is actually the base for offering the easy access from the Office suite," said Clare Hart, Factiva CEO.

"Our customer base is really looking for information in the context of the workflow of their employees," she said. "Being able to do that within Office 2003, we think is going to be very well received by our enterprise organizations," she continued. While employees do "work in CRM applications" they "spend most of their time in Office applications."

But Factiva is getting much more than a place in the workflow. The company also has snagged a place on the desktop. With Office XP, Microsoft introduced an optional Task Pane that adorns the right-hand side of a document. A similar concept is used in MSN 8 and the recently leaked version of Longhorn, the code-named next version of Windows.

With Office 2003, Microsoft is introducing several new sidebars, including the "Research" Task Pane. From there, business users can connect to the Encarta Dictionary or Encyclopedia, eLibrary and Factiva, among other information services. That means Factiva's service will be available to anyone using Office 2003.

The Research view uses XML to provide access to the data sources, which can be customized by enterprises.

"This can be internal content (available) straight across the organization"--not just Factiva or other external sources, Hart said. "Pharmaceutical companies might have internal research or R&D research in general. You might want to do a fact check, and you could do that across internal and external information."

Factiva already is looking ahead to taking advantage of other XML-enabled Office features, such as Smart Tags. Microsoft introduced Smart Tags with the release of Office XP and had planned to include the technology in Internet Explorer. But after complaints that the technology would usurp Web traffic, Microsoft pulled Smart Tags from IE but not Office.

Using a Smart Tag, Microsoft or a third party such as Factiva could link pieces of information in a document--such as a name or company stock symbol--to other information via pull-down menu, so that information would be available on-hand, without the need to even exit the document.

Hart wouldn't specifically discuss Factiva's plans for Smart Tags. "But you can imagine what could be next--being able to highlight a keyword and run a quick search or being able to link that to an index term," she said.

Factiva's use of Office underscores Microsoft's long-term strategy for positioning the rebranded product as a front end for all kinds of work processes--one that business users would rarely need exit. The key is the way Office uses XML, say analysts.

"We're pretty enthusiastic about the possibilities Microsoft's deep integration of XML in their Office products creates," said Jupiter's Schatsky. "There's a long road to travel from great idea to implementation. We think that is going to unfold over the next year or so."