Office 2003 agenda to tie in users further: analysts

Microsoft will face plenty of scepticism from customers that the extra functionality in its latest Office suite is an attempt to force organisations to buy additional products and tie them further into an interdependent platform, say analysts.

Microsoft will face plenty of scepticism from customers that the extra functionality in its latest Office suite is an attempt to force organisations to buy additional products and tie them further into an interdependent platform, say analysts.

Jupiter Research analyst Joe Wilcox estimates that businesses using Office 2003 will see their Microsoft licensing costs rise 10% to 40% if they want to take full advantage of the software's new features.

Research firm Meta Group expects scepticism from IT decision makers leery that Microsoft is aiming to upgrade more quickly and use more of its new server-side products.

Organisations considering upgrading are to hear first hand on such issues from early adopters at a meeting organised by Microsoft NZ in Auckland this Monday.

The analysts say Microsoft is shifting from positioning Office as an applications suite toward packaging it as a system. Office "System" contains the traditional applications, word processor, email, database, spreadsheet and so on, but also new applications and greater integration with XML and server-side technology. This includes SharePoint Portal Server, Live Communication Server (formerly called Real Time Communication Server) and the forthcoming Rights Management Services. While Microsoft has kept Office 2003's price tag similar to that of Office XP, businesses that want to use some of the software's collaboration and rights-management features will need to run the latest version of Microsoft's corresponding server software.

"We're seeing now much more of a focus on vertical integration between the client and the server," Wilcox says. "Microsoft is trying to position Office as the front end to a lot of back-end processes. They have a huge presence on the desktop, so they want to leverage that into all these back-end server products."

While integration traditionally lowers software costs, Microsoft's deepened product interdependencies have the opposite effect, by increasing the number of products customers need to license, he says.

Meta anticipates user criticism that Microsoft simply wants to hasten desktop deployment of the suite and additional products and that it is forcing organisations to buy into its vision "of an integrated software platform by establishing broad client and server dependencies at both the application and infrastructure levels". It suggests organisations perform an architectural impact assessment prior to implementation, examining business, information and technological ramifications. Still, Meta picks 30% of the largest 2000 global companies deploying the product in its entirety by 2005. Some 15% will reject it outright, though few than 5% will jump to Linux or tools such as OpenOffice as a result. The others, says Meta, will cherry-pick updated Office applications and server-side technology as they refresh their IT. The value proposition of Office and individual tools has faded in the minds of most large company managers, says Meta. Microsoft's ability to position Office as a platform for information worker depends on the success of SharePoint Portal Server, an information-location tool, though this "does commit an organisation to a significant Microsoft-centric architecture".

Says Jupiter's Wilcox: "Microsoft will argue that, long-term, [client-server] integration will cut down maintenance and operating costs and provide customers better ROI [return on investment]," Wilcox said. "To be honest, that remains to be seen. We won't know until customers actually start putting all the pieces together and see how much it actually saves."

Australian newspaper The Age, meanwhile, reports that software developer Eric Wilson told Microsoft Australia that its software breached three patents pending in the areas of "screen-paginated document display, electronic publishing and search result usage technology". But rather than hitting up Microsoft, Wilson told The Age that he would instead pursue its customers for "additional royalties and special conditions".

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