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 NEWSOffice bets on XML odds August 9, 2002 1:01 pm PT Ed Scannell
Historically immersed in a sea of proprietary APIs, Microsoft is in the midst of overhauling the Office code-base around XML to meet the interoperability demands of Web services and become the client window into its .Net strategy. But XML is a double-edged sword, promising Microsoft the riches of tight integration across its diverse product lines while simultaneously opening the door to competitive displacement. The next generation Office 11, scheduled to ship in 2003, will leverage XML so that it runs on a diverse collection of client devices from Tablet PCs, to PDAs, notebooks, and PCs. These devices in turn will facilitate user collaboration courtesy of a single Microsoft data store, Yukon, that links .Net servers such as BizTalk and Exchange, and Microsoft applications such as Great Plains, Navision, and Visio. The problem is that unlike days gone by, what's good for Microsoft is now good for its competitors. "Microsoft exposes everything through XML because it is so much more open than Windows. Other players can walk in, extract data, and present it back to their users through a different set of applications, and make a nice living doing that," said Dana Gardner, research director of the Aberdeen Group's Internet Infrastructure division in Boston. Gardner notes that Microsoft executives play down competitive risk by heavily promoting the company's unified software stack that will allow enterprises to integrate Windows and non-Windows data more smoothly and cheaply. In fact, the language coming from Chief Software Architect Bill Gates, CEO Steve Ballmer, and other senior executives speaks of solving "customer scenarios." "We don't see ourselves as just desktop developers," said Jeff Raikes, Microsoft's group vice president in charge of productivity and business services. "We think more along the lines of information work scenarios involving digital tools. This gives us the responsibility of thinking through what an end-to-end experience should be." It's an ethos that stems from Bill Gates' belief in XML's ability to foster the development of a rich set of client services. "[XML] has an impact across all types of software. I mean, literally the internal representation inside a word processor, a spreadsheet, as you're doing development of source code, the source code itself will be an XML document," Gates explained during Microsoft's .Net briefing day in Redmond, Wash. Underpinning this application vision are the forthcoming .Net Server OS, as well as its next generation SQL Server partner, Yukon, which boasts the unified data store and the ability to leverage structured and unstructured XML documents, Raikes said. Gordon Mangione, corporate vice president in charge of Microsoft's SQL Server team, agrees. "Our message to application developers is that Visual Studio .Net and SQL Server is the best way to develop .Net applications. If you want to know how to get ready for the next phase, it's to build on top of these products today," Mangione said. The strategy suggests that Microsoft is blurring the lines between traditional client and server technologies. Microsoft executives reflect this shift as internal developers on both sides of the company's client/server fence attempt to break down historical barriers. "If [Raikes'] desktop team is investing in user interface innovations for, say, messaging clients, I'd better damn well make sure that on the server I can handle that scale and that load, and deliver the piece of the story," explained Bill Veghte, corporate vice president of the Windows .Net Server Group. "Historically there was a little bit of confusion about the desktop guys doing one thing and the server guys doing another. But in my opinion we've really entered a new model for engagement." A shining example of where this new development spirit is headed is evident in the Office development team's significant contribution in building SharePoint Team Services, a portal platform that will increasingly leverage the collaborative capabilities of Office. According to Veghte, SharePoint Team Services is more than just a modern-day set of file and print capabilities. It's a critical platform on which corporate and third-party developers can build these advanced "scenarios" for portal products, document management, and workflow capabilities. And significantly, SharePoint is serving as a platform on which Microsoft can build and extend the capabilities of Groove Network's peer-to-peer technology. "I think it is very important that we think of what we do in the Office world as a smart client for plugging into SharePoint Team Services," Raikes said. "That is an environment that can be extended by Groove for new software services for things like notification services now, or in the Office 11 timeframe, for things like research services." Office 11's expected handwriting recognition capabilities, coupled with SharePoint's collaborative features, sets the stage for kicking Microsoft's mobile client products and strategies into higher gear. And of all the mobile clients on Microsoft's radar, it's the Tablet PC that Ballmer recently told financial analysts "should sell itself." Constantly at the center of Microsoft onstage demonstrations, Tablet PCs rely on Microsoft's handwriting technology and the collaboration features included in Office 11. But critics suggest the "scenarios" touted in these demonstrations are as much about software innovation as they are about retaining control of the desktop and protecting critical revenue streams. Microsoft's client revenue challenges were illustrated by the controversy generated by its Licensing 6.0 program, which went into effect July 31. Some of the company's larger customers signed on before the deadline, but many did not. "I rate the anger and animosity from users over the licensing plan to be more serious than competing in an open-standards world," said Dwight Davis, a vice president at Summit Technology in Boston. "The broad risk for Microsoft is moving from a business model which was based on owning the de facto standards to one that is moving into the world of open standards where it is very difficult to differentiate yourself," Davis said. A senior IT executive at a large regional insurance company agrees. "Those features they want to put into the new version [of Office 11] all seem practical and useful. But after having just moved to Office 2000 late last year, it will be another couple of years before we consider moving everyone to that product," the executive said. Aware of the issue, Microsoft is pressing ahead with its Office agenda. This week it launched a .Net Web service with PricewaterhouseCoopers and The Nasdaq Stock Market. Using XBRL (Extensible Business Reporting Language), the service allows investors and analysts to access financial data that is stored on the Internet and analyze that data using Office tools such as Excel. SPONSORED WHITE PAPERS 
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