Microsoft Puts Finishing Touches on Office 2007

Microsoft (Nasdaq: MSFT) said Monday that it has finalized its new Office 2007 code and released it to manufacturing. The productivity software suite will be available to corporate customers on November 30, along with the Windows Vista operating system and new Exchange e-mail server.

Consumer versions of the new Windows products will appear in early 2007.

Long Road

It has been a long path for Microsoft and its partners, who are counting on the new Vista-related products to drive sales . With the code complete, all Redmond has to do now is convince users to buy the products.

That might not be so easy, however. Although Office 2007 and Vista offer users compelling choices, Microsoft will probably have to battle with the inertia that delays any decision to upgrade, no matter who the vendor is.

"Most consumers won't upgrade unless they have a good reason -- they are buying a new computer, for instance," Laura DiDio, senior analyst with Yankee Group, told TechNewsWorld.

Buying habits in the business community, she said, are not much different. "About 15 percent of all users tend to upgrade because they want the latest features. They are the early adopters. At the other end of the spectrum are those users that don't upgrade until their hardware is falling apart or their software has completely died with no hope of resuscitation."

Microsoft's mission is to convince the remaining 70 percent that what it has to offer is so good they must upgrade, DiDio noted.

Victim of Its Own Success

Microsoft's earlier successes with Windows 2000 and XP could make that task harder. "It is a conundrum for any vendor," DiDio explained. "How do you balance customers' requirements and desires for higher performance, scalable, advanced and bug-free software against the fact [that] when you actually deliver [it], they tend to hold onto the software longer?"

Twenty percent to 30 percent of that core 70 percent group will upgrade over the next six to 12 months for various reasons, predicted DiDio. Reasons for upgrading range from new hardware improvements to the monetary incentives that Microsoft and its partners offer users who want to buy Office 2007.

New Interface, File Formats

The new capabilities expected in Office 2007 and Vista have been discussed at great length in the media, with Microsoft beating the drum the loudest in order to drive interest. Changes include a completely new Windows user interface, new file formats, improved search, and more-capable multimedia features.

The changes, though -- particularly the new interface -- could also represent a catch-22 for Microsoft, senior JupiterResearch analyst Joe Wilcox told TechNewsWorld.

"Microsoft's position is that the new user interface will increase productivity because it is more task-oriented and unlocks a lot of the capabilities that were already in Office that users didn't even know was there," he said. First, though, users will have to get past the change. "Some users like having a new interface; many, though, do not." Among those who do, he added, "there will be a learning curve to master."

A New, Unfamiliar Look

Microsoft's hurdle -- educating users about the new look -- could be key in determining Office 2007's competitive position.

One case that Microsoft typically makes for Office adoption is that it can serve as a ubiquitous front end to back-end applications.

"Everybody knows how to use it -- that is Microsoft's rationale," Wilcox said. "Now the story line is changed, because no one knows how to use this new interface. Microsoft is going to have to be very aggressive in getting users to experiment with the software right away."