Microsoft sets Office bundling terms

Microsoft will not include InfoPath and OneNote as part of the Office suite sold at retail or installed on new computers after all.

Microsoft had left some doubt about whether these new applications would be included with Office suites. OneNote will not be available with any of the bundles, while InfoPath will come with Office 2003 Professional Enterprise Edition. Microsoft plans to only make that version available to businesses subscribing to the company’s volume licensing program.

Six Office System bundles will be available, including a new addition for small businesses and another to be installed on new PCs. Microsoft plans to ship Office System this summer.

"By offering different versions of Microsoft Office 2003 for different types of customers with different needs, we will be able to offer customers the latest productivity tools that fit their needs and the way they want to purchase their software," said a company spokesman.

Some analysts said offering of InfoPath only to volume-licensing customers is an attempt to make Office 2003 more appealing and as another peace for some ill will created by the Licensing 6.0 programme.

Microsoft announced the controversial plan in May 2001. On 1 August, it fully enacted Licensing 6, where under two- or three-year "Software Assurance" contracts companies pay for discounted upgrades in advance of receiving the software. The new programme, which research firm Gartner estimated would raise licensing fees between 33 per cent and 107 per cent, also eliminated off-the-shelf upgrades that allowed businesses to purchase the software when they wanted.

Last month, a Yankee Group and Sunbelt Software survey of 1,000 technology managers worldwide revealed that 72 per cent of Microsoft customers did not sign up for Licensing 6.0. Sixty per cent of those who did reported an increase in software licensing costs.

The Office System bundling plan “could be part of an effort to show customers some value around those volume-licensing agreements," said Rob Helm, an analyst with market researcher Directions on Microsoft. But he also noted that larger companies with volume-licensing agreements would be best suited to deploying the product.

A Microsoft spokesman agreed. "Our primary scenarios target teams and organisations in the enterprise," he said. "Microsoft listened to customer feedback and added this to the Professional Enterprise suite sold through volume licensing, which is the primary way large and medium organizations will obtain Office."

InfoPath uses Extensible Markup Language (XML) to extract disparate data into meaningful forms. Microsoft is pitching businesses on InfoPath’s XML capabilities, which would allow a salesperson, for example, to pull notes from Word, expense data from Excel and appointment information from Outlook to generate a report.

Despite the product's potential, "It's unclear how committed Microsoft is to this app going forward," Helm said. The problem: The amount of overlap with some other core Office applications, such as Word.

Helm described limiting the bundling to larger companies as a "low-cost way of testing the waters for this app. If companies show a lot of interest, Microsoft might put more behind InfoPath."

The analyst described Microsoft's decision not to include OneNote with any of the bundles as "kind of odd. It's kind of being shunted, like Project and Visio." OneNote will be part of the Office System family, "but Microsoft seems satisfied not to offer it to 100 per cent of the install base," Helm 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 using a stylus; the program also works with a keyboard.

Besides InfoPath, the Enterprise edition of Office will include: Access, Business Contact Manager, Excel, Outlook, PowerPoint and Publisher. Business Contact Manager is an extension of Outlook that adds customer relationship management (CRM) information to contacts, calendars and email.

A similar bundle, Office 2003 Professional, will be available at retail and on new PCs, but without InfoPath. Office 2003 Standard, with Excel, Outlook, PowerPoint and Word, will be available at retail or through volume licensing.

Microsoft also will make two additions to the Office System family, one for small businesses and another as a low-cost option on new PCs. Office 2003 Small Business, Microsoft’s first retail product in this category, will come with Business Contact Manager, Excel, PowerPoint, Publisher and Word. Microsoft had offered a different small business bundle with Office 2000 and XP, but that version was only available on new PCs. The product also will be sold on new PCs and through volume licensing.

Joe Wilcox writes for News.com