Microsoft delivers new Office beta

With the second beta of Office 2003 expected to be doled out to a record 500,000 users on Monday, Microsoft continues its mission to broaden the suite's appeal to both corporate and mid-size companies by including three new XML-based applications.

The new beta includes for the first time the company's One Note and InfoPath, both XML-laced applications that make it easier for users to create and access data between the two as well as among the other Office applications. The beta also features a collection of improved "cross-application" features shared by all members of the desktop suite, including ink support, document and meeting workspaces, a research task pane, and Internet faxing.

But how successful One Note and InfoPath will be in attracting new users or enticing existing ones to upgrade -- something Microsoft needs to do to keep the enormous Office revenue stream flowing -- remains to be seen, according to some industry observers. Some think many users may not want to climb the learning curve associated with InfoPath, a product that is more for IT administrators than desktop users.

"I think it will take them time to get traction because people have to understand what they are being offered with all this. And part of offering new or different [products] is there is an educational process that has to occur," said Stephen O'Grady, senior analyst with RedMonk in Hollis, N.H.

OneNote allows desktop, laptop, and Tablet PC users to capture and organize their notes, including handwritten notes. Company officials describe it as a "staging area for preparing thoughts and ideas" before they are shared with others. Microsoft said last week that 30,000 users have already signed up for the beta. InfoPathuses XML to help desktop users pull a wide range of data together from all the Office applications into a single form that, in turn, can automatically update information among multiple applications.

While both applications will be in beta two, company officials continued to say last week that they have not made a decision as to whether they will bundle them into the finished suite, which is expected to be delivered around mid-year.

But O'Grady and others believe the steep learning curve will be worth it to users -- and to Microsoft, which needs to keep incorporating new functionality in order to keep the product's huge installed base of users interested in upgrading. Office accounted for roughly 27 percent of the company's overall revenue and about 45 percent of its profit in last year's fourth quarter, according to a consensus among market researchers.

"What they want to do is make Office less of a commodity office automation product and try to get enterprises to build it more into the fiber of the organization. That is where InfoPath and the XML features of Word and Excel come in. They want people to use the data they are creating in Word and Excel and integrate it in with their business apps," said Michael Silver, a vice president and research director with Gartner Group in Stamford, Conn.