MS Office to rival Windows soon?

Reed Stevenson

SEATTLE: Office, Microsoft Corp.'s collection of programs for business documents and tasks, is fast becoming a software platform unto itself.

A growing number of software developers are creating programs that run on top of Office, in the same way that Office and thousands of other applications run on Microsoft Windows.

Plug-ins are available that make Word a lawyer-friendly word processing system or turn the Excel spreadsheet into a virtual financial advisor, along with hundreds of other programs that boost the capabilities of Office software.

It was the vast number of third-party Windows programs that led to that platform's dominance of the personal computer market and made Microsoft the world's largest software maker.

"The most broadly successful software programs become a foundation," said Jeff Raikes, who heads the Microsoft division that includes Office.

Office generates $10.6 billion in annual revenue, making it Microsoft's second-largest business, behind Windows.

But Office -- which costs anywhere from $150 to $500, depending on what applications are included -- needs to distinguish itself against a deluge of cheaper programs that perform the tasks it does.

Canadian software maker Corel Corp., for example, has created its own suite of programs centered on WordPerfect. And Sun Microsystems Inc. is promoting its own StarOffice software based on OpenOffice, which is free.

Microsoft responded by expanding Office to include programs that do more complex tasks like managing projects, publishing print-quality documents, holding online meetings and setting up Web portals.

But the company's broader strategy is to make Office must-have software by opening up its technologies and fostering a community of developers to build programs based on it.

This "platform strategy" proved the making of Windows by spawning new ideas for features and services.

"Raikes wanted to get Office into that mode as well," said Rob Helm, research director at Directions on Microsoft, a Kirkland company that tracks the software maker.

To that end, Microsoft will hold its first-ever developers conference for Office in early February at its Redmond headquarters. It estimates attendance at about 600.

OFFICE VS. WINDOWS?

Raikes is largely credited for the idea of combining Excel and Word into one package called Office 15 years ago. Other programs, such as Powerpoint, for presentations, and Outlook, for e-mail, contacts and scheduling, came later.

Office has been so successful that the Department of Justice thought it could set up Office as a competing platform to Windows.

While that never happened and the government's landmark antitrust case against Microsoft was resolved in 2002, Helm said it underscored the need for Office to compete as a software platform.

"If (Microsoft) can't get people to add value on top of Office, there is a risk that open-source alternatives will catch up," he said, referring to freely available software such as OpenOffice and Linux.

Microsoft is confident, however, that it can entice more developers to create programs for Office because of the sheer scale of its user pool.

"When you have 400 million people using Microsoft Office every day, it provides a lot of incentive for developers to use that capability," Raikes said.

In fact, last year, with the debut of Office 2003, Microsoft began calling the package a "system" of products and services instead of a "suite" of applications.

One lingering issue is the lack of effective software tools and standards that developers can use to build programs on top of Office, compared with Windows. Microsoft introduced a special edition of its Visual Basic programming tool software for Office in 1997, but that has since been overtaken by newer technologies.

That can be a headache for third-party developers like Newsgator Technologies Inc., which sells a plug-in for Outlook that allows users to subscribe to Really Simple Syndication feeds into Outlook.

The $29 program pulls in news articles, blog postings and other syndicated information into Outlook and displays them within the same environment used for e-mail.

"The nice thing about Outlook is that (many people) already know how to use it," said Greg Reinacker, Newsgator's founder and chief of technology.

Another issue for developers is the chance that Microsoft will bundle in new features into Office since that would make their software obsolete. Raikes said, however, that his division was well aware of the issue because of Microsoft's experience with Windows.

"Whenever you're in the software platform business, you have to think very carefully about the broader ecosystem," Raikes said. "This is not new for us."