Microsoft's Next Office Suite Shapes Up

The covers are finally coming off the next version of Office, which will start finding its way into the hands of beta testers this fall. It'll be another year-plus before Office 12 (Microsoft will rename the software before it ships) arrives on your company's PCs, but it's not too early to see what's in store. At a glance: A new look, lots of new technology, and advice from Gartner to wait and see--or skip it.

The biggest outward change in Office 12 is the disappearance of drop-down menus, a mainstay of Windows (and Mac) software for 20 years. Instead, Office 12 uses a row of icons for common functions that change based on what you're doing (user interface designers call that a 'modal' interface). So clicking on the menu choices in Word, for example (they're new, too--'File,' 'Write,' 'Page Layout,' and 'Review,' for example) calls up a ribbon of contex-sensitive icons. Word's ballooned to include more than 1,500 commands, so unearthing the popular ones from drop-downs could make things easier to find. Microsoft says lots of users answer its surveys about what new features it should build with ones that are already there.

It could also be easier to create attractive documents. Hovering the mouse over font choices in Office 12's version of Word previews the entire document in the selected font. And Microsoft's built in new tools to quickly create callout quotes and do other desktop publishing tricks.

Excel gets a refresh, too. In addition to the modal tabs of icons, Microsoft's built in new features that let users build bar graphs and three-color charts right in a table of numbers based on their values. Rounding out the Office apps, PowerPoint includes a new feature that turns text into a diagram or flow chart with a couple of clicks. Outlook includes a new "to-do" list pane. Microsoft showed off the new user interface and features for the first time publicly at its Professional Developers Conference in Los Angeles this month. They make a good demo; now IT departments have to see whether users cotton to them.

Office 12 also includes new technology that's less visible. A few months back, Microsoft said it's changing the file formats for Office apps to save as XML automatically. That could speed up E-business. The company is also building in new "Windows workflow foundation" software for easier routing of documents for apps like approvals and reviews or expense reports. Microsoft's publishing a set of APIs that can connect business apps to Microsoft's SharePoint server.

SharePoint's getting a boost in search functionality, too. The version that arrives alongside Office 12 will be able to comb not just documents published inside an organization, but also structured information like product catalogs, employee directories, or business apps, Microsoft chairman Bill Gates said in an interview this month. So when a user types in the name of an account, they could get back search results that include not just documents mentioning the company's name, but also the right CRM record.

So should your IT department make the jump to Office 12? If you have Microsoft's Software Assurance agreement, youll get the upgrade. But IT consulting company Gartner recommends a wait-and-see approach. In a report published this week, Gartner said most big companies will find it hard to justify upgrades in '07 and '08--assuming Microsoft even makes its ship date of late next year. Factor in big upgrades to Windows and SQL Server coming in the next year as well, and IT departments could have their hands full for a while. Companies that just invested in Office 2003 might skip version 12, a Gartner analyst says. And IBM's Workplace suite could make a good alternative, too.

Finally, Gartner's report noted that Microsoft's been mum about integrating into Office collaboration software from Groove Networks, which it acquired in March. "It will be a bad sign" if Groove isn't integrated by the time Office 12 ships, the consultancy said. At the PDC, Microsoft senior VP Steven Sinofsky told me Microsoft will publish a road map for Groove "pretty soon," but wouldn't elaborate.

In any case, Microsoft needs Office 12 to perform better than its last couple of releases. According to Gartner analyst Michael Silver, Microsoft hit a high-water mark for popularity with Office 97, upgrading 70% of its installed base. That dipped to 60% with Office 2000, and plunged to 30% by the time Office XP rolled around. Office 2003 looks like it will do better by the time its life is over (even Microsoft admits Office XP was a dud), but the trend's going in the wrong direction.

How compelling are Office 12's new technologies to your company? Post a comment and let us know.