Promises, Promises: VARs: Office 2003 Rides More Shelves Than Computers

Longhorn slips and slides may be a future challenge for Microsoft. But getting Office users to upgrade is a more important immediate concern.

Microsoft loves to talk about the promise of better collaboration, better process integration and so forth offered by the new Office System. It also likes to report how the licensing run rate exceeds expectations. What's left unsaid, nearly a year into the product's release, is how relatively few Office 2003 desktops are actually deployed.

While many companies have signed on for the upgrade, even early adopters say they've installed just a small percentage of their seats. Many were waiting for Service Pack 1, which shipped in late July, but the slow upgrade goes deeper than that, channel sources say. "Most people see no reason to move," said one longtime partner, who requested anonymity.

Customer inertia is no surprise. Microsoft Group Vice President Jeff Raikes has said Office's biggest challenge, given its 90 percent-plus market share, is upgrading existing users.

"Actual Office 2003 deployment has been disappointing to them, and they're doing all they can to spur actual use of the product," said one large reseller. The issue arises when volume licenses come up for renewal and customers look at the shelfware from the last go-round. They often wonder why they should sign up.

"Microsoft is scared [to death] of the amount of Office 2000 still out there. It's still the bulk of the installed base," said one insider. Office 2000 shipped in June 1999; its successor, Office XP, shipped in March 2001.

One early adopter, Katten Muchin Zavis Rosenman, has deployed about 25 percent of its 1,600 users, said Alex Diaz, enterprise development manager at the Chicago law firm. The company had to make sure other applications such as Interwoven Worksite and HotDocs document assembly software were tested with the new release.

Continental Airlines has rolled out "a decent chunk," probably 20 percent to 25 percent, said Eric Craig, managing director of technology in Houston. "Our biggest impediment to rolling out new versions is we've written a lot of little VBA apps, so there's a testing process," he said.

The exception that proves the rule may be Boston-based Digitas, an early adopter that upgraded all of its 1,200 desktops to Office 2003 from Office XP early this year, according to Erik Dubovik, vice president and director of IT.

At the other end of the spectrum is a Fortune 100 company ensconced on Office 2000. An IT manager there said the company refuses to get hooked on shelfware. "We buy what we want, and we don't buy anything we don't deploy," he said.

Microsoft wants to entrench its software stack in every account, but some customers balk, especially since the vendor's wares continue to be plagued by security woes.

"Office is the portal into Microsoft's technology stack. The question is how much do you want to get on the juice and pay for all that?" the Fortune 100 IT manager said.

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