Microsoft kicks off giant Office beta program

Microsoft Monday is set to release the public beta of the next version of Microsoft Office, aiming to reach half a million users in one of its biggest programs ever to test out new software.

Office 2003, which until now was known by the codename Office 11, is set to launch midyear and includes two new applications, a new interface for sorting e-mails in Outlook, and several other tweaks that Microsoft hopes will entice customers to shell out for an upgrade to their existing version.

“We’re going to be making 500,000 copies available, which is one of the largest beta programs Microsoft has ever done – certainly the largest Office beta we’ve ever done,” said Simon Marks, product manager for Microsoft Office.

The beta is being distributed widely in order to gather feedback from as many users as possible, and because Microsoft hopes those who test the product will like it and be among those who upgrade, Marks said. To take part users must have either Windows 2000 with Service Pack 3 or Windows XP.

Microsoft is also changing the way it markets the product in an effort to position it as a more essential tool for businesses. The official name for its Office family is now Microsoft Office System, and Microsoft will try to position the products as a “unified platform” that can be customized to make businesses more efficient, rather than as individual applications for boosting personal productivity, Marks said.

With that in mind, for example, Microsoft included Version 2.0 of SharePoint Portal Server as part of the beta, which lets teams of workers collaborate on projects over the Web using various Office applications. It has also emphasized greater support for XML, making it easier to import data from back-end systems into applications such as Excel, Marks said.

He acknowledged that many businesses have only just begun to make their CRM and ERP systems XML-ready, but argued that the added XML support in Office will give them one more reason to do so.

The software suite also boasts a new logo that looks more like a flower than like the traditional Windows motif. And all of the applications now include Office in the title, creating Office Front Page 2003 and Office Word 2003, for example.

One of the new applications is OneNote, which is intended to be the digital answer to the notepad and pen and lets users jot down notes anywhere on a page and saves them as they are created. The other is InfoPath, for creating forms where users can save data in the XML format, making them readable by back-end business software.

The beta also includes at least three features Microsoft hadn’t discussed previously, Marks said. They include Business Contact Manager, an add-on to Outlook that aims to provide CRM capabilities for businesses with up to 25 employees and that don’t require a more powerful, specialized CRM tool.

Also new is “information rights management,” which allows users to put restrictions on who can copy, forward or edit documents created using Word, PowerPoint and other applications. The beta also includes new tools in Outlook for filtering junk mail, Marks said.

The company isn’t prepared to talk yet about pricing; nor would it say whether the new applications will be included in a version of the suite or sold separately only.

One analyst said Office 2003 fixes some bugs and adds a handful of new features that businesses will appreciate. But on the whole the product offers relatively few changes compared to past upgrades and is unlikely to prompt customers to upgrade on a wide scale, particularly at a time when budgets are tight, said Paul DeGroot, an analyst at Directions on Microsoft Inc. in Kirkland, Wash.

“The Office suite is a very mature product with a large installed base. A lot of people are comfortable with the current version and Office 2003 doesn’t offer any dramatic benefits (over the previous release). I don’t expect this to be a barnstormer,” he said.

Microsoft Office controls more than 90% of the desktop applications market, according to analysts, but rivals are knocking at Microsoft’s door. Corel, for example, said this month that it plans to release a new version of its WordPerfect suite in late April, while Sun plans to issue a beta of the next version of its StarOffice suite later this week.

Office is one of Microsoft’s biggest cash cows. In its most recent quarter, the company’s Information Worker division, of which Office is a major part, generated $2.4 billion of the company’s $8.5 billion in revenue, along with more than half of its gross profits.

The company hopes to keep that going despite the recent slowing of PC sales. Jeff Raikes, who heads the Information Worker division, has said Microsoft’s goal is to double the revenue generated by Office over the next 10 years, to around $20 billion annually, Marks said.

The software released Monday is actually Beta 2, since a nonpublic beta was issued in October to a smaller number of users. Beta 2 consists of 15 CDs, providing the option to install the whole suite or various parts of it, Marks said.

More information about the beta program can be found here.