Microsoft launches new Office, but will it sell?

Microsoft has launched Office 2010 for businesses, but the software maker is facing uncertaintyover how many companies will actually make the upgrade.

The Redmond, Wash.-basedcompany held media events in Canada and the United States on Wednesday to herald the launch of Office, whichpacks the latest version of Word, Excel, PowerPoint and other programs.Microsoft predicted it will be the fastest-adopted version in its 20-year history, but software industry analysts weren't so sure.

Antoine Leblond, senior vice-president of Microsoft's Office productivity group, said businesses will be attracted to a number of new improvements that have been designed to meet the trendsthey're now facing. The software resides on the computer it is installed on,but unlike previous versions, Office 2010's programs Word, Excel, PowerPoint and others now also pack web-based components that allow users to access them from anywhere.

Those components are also designed tomake real-time collaboration possible, Leblond said, whichtakes into account the dispersed workforces that many businesses have.

"Things like that make a huge difference in terms of productivity," he said at a media event at the Hockey Hall of Fame in Toronto.

Sean Draper, director of research, analysts and software development for the Edmonton Oilers, said his hockey club has been using a pre-release version of SharePoint 2010, a related tool launched in conjunction with Office, to conduct real-time player scouting conferences. The tool allows the team's management to communicate and interact with scouts live in the field, as they are watching players.

"There are other scouting tools out there, but they stop short of collaboration," said Draper, who also spoke at the Toronto event. "Gone are the days of [communicating via] 'send' and 'receive.'"

Leblond also saidaspruced-up version of Outlook, the email program, provides better organization and filters to hide less important messages and conversations. Thatwill help businesses deal with information overload, anotherof their biggestcomplaints.

Businesses may not buy in

Some software industry analysts don't think Office 2010 will sell as briskly as Microsoft expects. According to a survey by IDC Canada late lastyear, 80 per cent of Canadian businesses with more than 100 employees had already upgraded to the last version, Office 2007, or were thinking about it.

While Microsoft is facing pressure from Google and its free productivity software, Google Docs,the company's biggest enemymay beitself, IDC says.

"The real compelling issue isn't just dealing with future disruptive innovation of the 'cloud' and Google Docs, it's also dealing with how do you encourage people to move past the earlier iterations of your product line onto the newer one?" said Nigel Wallis, research director for application solutions at IDC.

"Google Docs is a problem, because it really hurts them on the pricing side, but the install base [of Office] is the bigger problem."

IDC's findings agree with a recent survey done by rival analysis firm Forrester. The main reason businesses gave for not upgrading to Office 2010 was that they had just recently moved, or were in the process of moving to Office 2007.

Wallis said the lingering effects of the recession will also likely cause some businesses to hold off on upgrading.

"Is productivity going to be an area where Canadian companies feel they should fully invest their resources into? I'd be hard pressed to think that's the case," he said.

A better course of action, he added, is for Microsoft to simply incorporate new Office features directly into an automatic online update as they are created. The old method of waiting several years between updates is outdated, he said.

The consumer iteration of Office 2010 will be released during the summer andwill feature an even greater focus on web-based software, with free versions of programs such as Word available. Microsoft is facing an even bigger challenge from Google on the consumer front, with the online search leader targeting young users and university students.

Google has argued that consumers don't need to continue upgrading Office and that they can store all of their documents for free online. Microsoft's Leblond said that argument has holes in it because online software still has nowhere near the functionality of Office programs.

"Google's argument about co-existence is a little hollow," he said."Take a PowerPoint presentation that has any richness and open it up in Google Docs and look at what it looks like. It gets completely destroyed."