The newest version of Office will make better use of the cloud and social networks, and CEO Steve Ballmer says an uncompromised version will run on tablets.
With the newest version of Office, Microsoft is touting more flexibility regarding where and on what device you can access its key productivity software.
Office remains a crown jewel for Microsoft, and its latest revamp puts the software in line with the new Microsoft look, where it fits in with Windows 8, Windows Phone 8, and the updated Xbox, among other products. While Office remains a dominant product used by most people in businesses, it faces competition from low-cost alternatives, including Google's suite of Web-based office applications.
Microsoft hopes to keep its lead going with Office and is embracing all the latest technology trends. The company plans to sell Office as an online subscription service. It will integrate with social networks, including business-centric network Yammer, and have better integration with Skype. It'll also play nice with tablets.
CEO Steve Ballmer said the new Office will run just as well on a traditional PC as it will on an ARM-based device, which right now are made up of tablets. He stressed that Office on a tablet will be an "uncompromised experience" and that it wouldn't be a "junior version" of the full PC edition.
The company spent a decent amount of time showing off the touch-screen capabilities of Office, demonstrating how users can swipe, tap, and pull off other gestures to create presentations. Users can also use a stylus on their projects.
That's important because Microsoft is still making the case that a Windows 8 tablet is still worth buying. Android tablets have had made little dent in the market dominated by Apple's iPad, but Microsoft has made a strong case with its
Cloud also played a big part in the presentation. The company plans to use its SkyDrive as a central repository for files and data from Office. After you sign in, you'll see the same settings, templates, dictionaries, and recent documents across all your Windows devices -- PCs, tablets, and smartphones.
Using Word as an example, Kirk Koenigsbauer, a corporate vice president for Office, showed how users can insert pictures through the traditional Office.com clipart, through image searches via Bing, by opening something from SkyDrive, or by grabbing something from Flickr. Even further, Office can incorporate live multimedia into its documents, with a user embedding a live YouTube video, for example.
Through the SkyDrive integration, people receive a message asking if they want to work on the same document they were using on a different device. And by storing documents directly on SkyDrive, users can share them with colleagues and friends.
Microsoft hopes its customers will move with it toward a subscription service, rather than a onetime retail purchase. The company is dangling SkyDrive space and Skype minutes as a carrot to lure people into the online subscription model.
A demo of the new version of Outlook also revealed how to go through e-mail messages and quickly go through in-boxes by tapping on messages. A new Quick Actions tab lets people move, delete, flag, or forward messages as well. Finally, a feature in Outlook called Peek offers an interactive look at People, Calendar, and Tasks.
Office is hoping to get more social. Microsoft also showed off a five-person video chat using Microsoft's Lync application, and demonstrated the ability to share files such as a presentation. The company talked up Yammer, the business social network it acquired earlier this year, which works with Sharepoint, a program that allows you to share and view pictures, video, and Office files.
Other Windows 8 programs include digital note-taking app OneNote, which works on multiple devices using different input, from touch, pen, to keyboard.
Ballmer and Koenigsbauer used an 82-inch touch-enabled display, which they said would come in handy in meetings, presentations, and lessons.
Microsoft will launch with three tiers of subscription service: Office 365 Home Premium, Office 365 Small Business Premium, and Office 365 ProPlus. The company said it would provide more pricing information in the fall.
For now, the customer preview is available here.
CNET's Lance Whitney contributed to this story.