New Office beta to launch next week

Microsoft plans to officially launch Office 2003 Beta 2 on Monday, a release that will include a public preview available to several hundred thousand beta testers and businesses, according to sources close to the company.

The launch will come almost three weeks after Microsoft inadvertently posted the software on the Microsoft Developer Network website. The company pulled the software about six hours later, following an inquiry.

A Microsoft spokesman declined to comment on the new beta ahead of its official release, which could possibly be delayed because of last-minute problems or a change in the company's plans. In mid-February, it was reported that Beta 2 would ship around the second week of March.

Office is one of Microsoft's two flagship products, approaching the importance of Windows. In the most recent quarter, Microsoft's Information Worker division, which is largely made up of Office, accounted for $2.4bn, or about £1.4bn, of the company's $8.5bn in revenue, and $1.88bn of the $3.25bn gross profit.

Microsoft issued the first Office 2003 beta - then code named Office 11 - in October. The software titan expects to ship Office 2003 during the summer but has not revealed an exact date or pricing. Microsoft also hasn't discussed how new Office products OneNote and InfoPath will be bundled with the productivity suite. The new products could be included in the suite or offered separately, as is Visio.

As with previous versions, Microsoft is expected to offer standard, professional and developer Office suites, and a small-business edition available only on new PCs.

The 12,000 Beta 1 testers could start receiving software kits as early as next week. Microsoft also has been signing up new testers for OneNote and for a public preview of the Office 2003 suite. On Tuesday, Microsoft disclosed that about 30,000 people had signed up for the OneNote beta. During the earlier Office 11 Beta 1, only a small number of testers received OneNote and InfoPath.

People signing up for the public preview are expected to pay for shipping. In the past, Microsoft has offered public previews for free but charged between $20 to $30 for shipping and handling.

The new Office 2003 beta will be one of the largest groups of products Microsoft has tested. Besides Office 2003 Professional, which includes Word, Excel, Outlook, PowerPoint and Access, Microsoft also will offer betas of the FrontPage website creation and management application, InfoPath, OneNote, Outlook with Business Contact Manager, Publisher, SharePoint Portal Server and SharePoint Services.

On Monday, Microsoft renamed SharePoint Team Services to SharePoint Services. SharePoint Services, a technology for collaborating over the Web is separate from SharePoint Portal Server, which is used to create business web portals.

Prospective Office 2003 testers will find Microsoft has made many changes to this iteration of the software compared with the differences between versions 2000 and XP.

"I think Microsoft has worked hard to make the new version of Office as appealing as possible to enterprise customers," said Gartner analyst Michael Silver. But as compelling as the new features might appear, many businesses would be "risk averse enough to wait a year or more to deploy Office 11".

The most significant changes for some businesses could come from the addition of new applications, such as OneNote and InfoPath, Silver said.

OneNote is expected to appeal to users of portables running Microsoft's Tablet PC operating system. Tablet PC users can jot down notes or ideas in free-form fashion using a stylus; the program also works with a keyboard.

InfoPath uses Extensible Markup Language (XML) to extract disparate data into meaningful forms. For example, a salesperson could create a custom form using XML data culled from Word, Excel and Access to create a report on a visit to a customer. The form could include notes taken in Word, expenses from an Excel spreadsheet or contact data from an Access database.

Overall, XML is expected to be one of the biggest changes in Office for many businesses, said Gartner analyst Wes Rischel.

"The thing about XML is you can do anything with it, if you do enough programming," he said. Information created as XML can easily be exchanged or defined for specialised "vertical applications".

Most Office applications will be able to save information as XML, greatly facilitating the exchange of data between applications. This could help many businesses free up valuable content locked in Office file formats. The new beta could answer whether Microsoft continues on its path of using proprietary XML dialects, or schemas, or takes a more open approach that would better facilitate compatibility with competing products, such as Corel's WordPerfect Office or StarOffice from Sun Microsystems.

Another new product, code named Iris, will be Outlook 2003 with Business Contact Manager. Like OneNote and InfoPath, Iris reached only a small number of testers during Beta 1. The new version of Outlook will add customer relationship management (CRM) features that could appeal to small- and medium-sized businesses.

Paul DeGroot, an analyst with Directions on Microsoft, said the new features would encroach on some software developers' territory. "Microsoft has been doing more of that recently with their business intelligence products and CRM."

Businesses would benefit from being able to replace more expensive, entry-level CRM software with the new version of Outlook. "As you remove a layer of business, you remove a layer of cost, which plays to Microsoft's strengths," DeGroot said.

In general, Outlook is the most overhauled application in the new Office suite. Microsoft has moved the preview pane from the bottom of the screen to the right, so messages appear like full-page documents. The company also scrapped the Outlook Bar and beefed up security features.

Outlook 2003 also offers two anti-spam tools. By default, the program does not display images contained in web-based email messages; it is not uncommon for the messages to contain so-called web beacons used by spammers to check the validity of an email address. The second tool is a "Junk Email" filter that can delete spam or move it to a special folder.

Another important change to Office 2003 comes with increased SharePoint Services integration. In an attempt to increase Office's value, and therefore encourage businesses to upgrade, Microsoft has greatly refined the collaboration features in the new Office.

The improvements will be needed to convince customers to upgrade.

"Microsoft needs to find more ways to increase the appeal of Office," Silver said. Microsoft's biggest competitor is "older versions of Office". In fact, Office 2000 gained market share last year, he said.

SharePoint Services allows business users to create online shared workspaces where they can work collaboratively on documents. Integration supporting the technology runs deep in the new Office. If someone chooses to send an email picture, for example, Outlook offers to send separate attachments to each recipient or make a copy available online in a shared workspace. Each recipient would then have the option of viewing or making changes to the attachment.

Microsoft also has greatly overhauled the Task Pane that optionally runs down the right side of a document. Among other things, the Task Pane is used to create and manage shared documents.

On the security front, each Office document comes with a "Permission" button for setting access to the document. The feature relies on Microsoft's forthcoming Windows Rights Management Services, a new security technology coming for Windows Server 2003.

Microsoft already has posted a digital rights client for use with Office 2003 Beta 2. The feature encrypts each Office document and issues a licence that must be authenticated by a server. The feature can restrict who has access to a document or even prevent the forwarding of email messages.

Joe Wilcox writes for News.com