More Office System Servers, Services On The Horizon

The current Office System lineup--including the various Office SKUs, Live Communications Server, SharePoint Portal Server, Project Server, Content Management Server, etc.--is just the beginning of an array of planned Office System-labeled servers and services, Chris Capossela, corporate vice president of Microsoft's Information Worker Product Management Group, said in an interview Wednesday.

CRN last month reported on plans for an upcoming InfoPath Server to ease forms distribution, as well as additional Office servers in the Office 12 timeframe around 2006. (Office 12 is Microsoft's internal name for the successor product to Office 2003. It will run on Windows XP, Windows 2000 and leverage "some features" of the promised Longhorn version of Windows.)

Office 2003, which shipped almost exactly a year ago, exemplified Microsoft's first concerted attempt to extend the Office franchise beyond the Word/Excel/PowerPoint desktop powerhouse into a software suite with more functionality, much of it doled out by back-end servers.

Capossela declined to further detail upcoming products but said the "concept of the Office System, of programs, servers and services organized around productivity needs" will continue. "We're not ready to talk about the next versions, about packaging and products. It's too early to see how that will shape up," he said.

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Also on the horizon are special, differentiated versions of the Office desktop suite for certain customer sets, Capossela said. Microsoft already fields a low-cost Student and Teacher edition and Small Business Edition of the Office suite, besides its more horizontal Standard and Professional editions.

Capossela said Microsoft is happy with the trend in Office 2003 sales and deployment over the last 12 months. For the company's last quarter ending 2003, the Information Worker Business Unit--which includes Office--saw its revenue rise 14 percent to $2.56 billion from $2.25 billion a year earlier. That growth, in turn, owed much to a 13 percent growth in volume license and retail sales, as well as a favorable year-ago comparison period.

Yet some partners and customers say Office 2003 rollouts remain a slow go, with many new licenses yet to be deployed. Microsoft executives, including Capossela, say the desktop Office's primary competition are old versions of Office and customer inertia, and that's why the company seeks new features and functions--often delivered from servers to the rich Office client--as a way to drive upgrades and more revenue.

For example, the Office group could take better advantage of other Microsoft technologies such as SQL Server Reporting Services. Reporting Services ship with the SQL Server database and are already available via Project Server, which requires the database, and will likely surface in other Office offerings, Capossela said. Reporting Services let users slice and dice relevant data and format it appropriately. Users already can dump report data into Excel to drill down further.

To drive Office customer satisfaction, Microsoft continues to rely on the Watson feedback tool to delve into the reasons for crashes and other problems, as well as Content Watson, which provides a feedback loop for users to critique the help files and other Office-related content. Updated help files based on that feedback get posted to Microsoft Office Online.

Office users also continue to depend on even more in-depth customer data provided by SQM, or Service Quality Monitor. Users can opt in to provide Microsoft with information about which commands they use most, for instance.

The use of SQM is a big part of Microsoft's Customer Experience Improvement Program, Capossela said. "We don't collect your data. We see actual commands logged, regardless of whether they're done by mouse or keyboard. When you install Office, you can check a box if you want to participate or not," he said.

With the Office System and its various servers and clients, Microsoft continues to push its huge software stack. The Office desktop suite faces competition from Corel Office, the open-source StarOffice/OpenOffice tandem and the emerging IBM/Lotus Workplace components, according to industry observers. The Office System also could see competition from a rising tide of more functional freeware from Google, which is now offering local and Internet search services plus its Gmail e-mail service.

Though Microsoft clearly is the top dog in productivity applications, its huge market share in the software arena is also a big front to protect. The Information Worker unit logged 13 percent revenue growth for the first quarter ending Sept. 30. Microsoft attributed much of that gain to a 13 percent, or $261 million, boost in volume licensing and retail sales, and to a favorable comparison with the year-ago period.