Take a closer look at Microsoft Office

A distinction that Microsoft is making between professional and standard versions of Office 2003 means that many customers may not get all the features they've been expecting, including broad support for Web services.

For more than a year, Microsoft has touted Office 2003's support for Extensible Markup Language (XML), a highly anticipated new feature of the productivity suite. But Microsoft now plans to fully deliver the feature only in the two high-end versions of the product, one of which will be available only to businesses subscribing to Microsoft's volume-licensing program.

Two other features also are similarly restricted: the document protection technology Windows Rights Management Services (RMS), and Excel List, a feature for improving analysis of data lists. Microsoft plans to deliver the three features only in the Enterprise and Professional versions of Office 2003, the company confirmed late Thursday.

At no time during two phases of testing, one in October and another in March, did Microsoft make it widely known that XML support would not be available in all versions of Office 2003. The most recent beta test version, available to an estimated half-million testers, delivers the full XML feature set promised by Microsoft.

Judging the limitations of Office's XML capabilities is difficult, since the beta sent to testers by Microsoft contains the Enterprise version. But Microsoft claims that the differences in XML support aren't all that great and are justified because of the target markets.

"In talking to customers about their interest in these capabilities and what they are used for…it was clear that they would be of most interest to enterprise customers who commonly purchase Office Pro," said Dan Leach, Microsoft's lead product manager for Office. "By only having this in the Pro version, customers who don't want this aren't paying for it."

But analysts contend that Microsoft hasn't made much of an effort to communicate this distinction to potential Office 2003 customers. In marketing material posted the same day last month that Microsoft announced the release of Office 2003 Beta 2, "user-defined" XML schemas are a highlighted as one of the suite's important new features.

"This seems to confuse the messaging around Office 2003 generally," said Paul DeGroot, an analyst with market researcher Directions on Microsoft. "Microsoft has put a lot of effort into pitching these new features. Now it appears that Microsoft believes they're not critical to many customers."

The only hint that Microsoft might have had other plans came in an announcement last week on the six different Office 2003 versions, or stocking keeping units (SKUs). Microsoft's fact sheet on the Office SKUs highlights user-defined XML schemas, RMS and Excel Lists as features part of the Office Enterprise and Professional, but doesn't indicate that those features won't be part of other Office versions.

"Until the announcement about the SKUs, Microsoft pitched features such as user-definable XML schemas as applying to Office 2003 generally, without ever mentioning that this feature would appear in only certain SKUs," DeGroot said. "Although it is a significant change, it was announced with little fanfare."

The change also means that Microsoft has quietly redefined the meaning of Office Professional without clearly communicating the difference to customers.

"Previously, the SKU difference related to the app included, but all apps functioned the same," said Jupiter Research analyst Michael Gartenberg. "Here, it's really caveat emptor."

With Office XP, the defining difference between the Standard and Professional versions was the inclusion of the Access database software. Otherwise, product features were identical.

Schema, or scheme?
Microsoft's shift on which features go in which version is important because of a longstanding controversy over the extent to which Office would support XML.

XML is fast emerging as the preferred means of formatting data delivered in back-end business processes or Web services. But unlike HTML (Hypertext Markup Language) tags, which are universal, XML tags

		Special Report XML makes its mark Developers reflect on the Web's lingua franca.

can be customized by developers and so need to be communicated to the software that reads them. The XML tags that define the elements of a document are collectively called a schema. Microsoft has yet to disclose the proprietary dialect--or underlying schema--of the XML used in Office 2003.

Still, giving Office 2003 users the ability to create their own schemas allows them to extract data in a way appropriate to their business and also have more control over the information. This could be very important for the large number of businesses with corporate data locked in Microsoft proprietary file formats. This data lock affects all Office customers, not just those who would be the target market of the Enterprise and Professional editions of Office 2003.

Microsoft's Leach emphasized that this change in positioning doesn't negate that "customer-defined XML schema support is a feature of Pro." On the other hand, he also acknowledged that XML documents saved using other versions of Office would be saved using Microsoft's own schema.

"When you are using Word in Office XP or the Standard version of Office 2003, the WordML--Microsoft's XML schema, which is 100 percent compliant with industry standards for XML--is saving the formatting of the Word doc."

But analysts contend that WordML's compliance with industry standards is a misnomer. Because the schema isn't fully documented, people who want to edit files created in Office 2003 will only be able to do that with Office itself, as before. Text in Office 2003 files stored in XML format might be viewable in other desktop programs, but all document formatting would be lost and most other files would be unreadable.

Such a move could also hamper data exchange with competing desktop productivity software that recognizes XML, such as Corel's WordPerfect or Sun Microsystems' StarOffice, say analysts and competitors.

"From the beginning, there was a question whether Microsoft was going to buy in completely to XML," said Technology Business Research analyst Bob Sutherland. "Microsoft is often trying to spin their message, and they want to appear as if they buy into (open) standards. But they always put in the proprietary hooks somewhere in the final release of the product."

Other companies are interested in the easy exchange of XML data on the desktop. In November, members of the Organization for the Advancement of Structured Information Standards (OASIS) established a committee to create that standard for office productivity applications. Supporters, which include Corel and Sun, are using the XML specifications developed by the open-source OpenOffice.org project as a starting point. Microsoft is not a participant.

A question of price
Microsoft's limits on XML support means that customers looking for true portability of their data will have to buy the most expensive version of Office. While the company has not yet released pricing for the Office SKUs, the Professional and Developer editions typically have been the most expensive. Office 2003 Enterprise Edition replaces the Developer SKU available with earlier Office versions.

"We've never believed that Microsoft would truly make their XML format interoperable," said Gregg Nicholas, a technology manager from

		Special Report A mortal Microsoft Competitors and customers find cracks in the software empire.

Berrien County, Mich. Microsoft's "standard operating procedure with standards seems to be embrace, extend and exterminate. Despite the hype from their public relations department, I've seen no reason to believe that they would act any differently with XML."

For this and other reasons such as low-cost "viable alternatives" to Office, "it is uncertain that we'll be upgrading," Nichols said.

Still, DeGroot, Gartenberg and some other analysts continually briefed by Microsoft expressed surprise that the company would backpedal so seriously to protect its proprietary Office formats.

In an interview with CNET News.com last month, Jean Paoli, Microsoft's XML architect, said, "I'm out of the business of creating formats. Our focus on Office is on data exchange." He emphasized, "There is no more difference between documents and data."

But the limiting by Microsoft of full XML capabilities to certain versions of Office means many customers could have to live with proprietary formats for a while longer. In the process, Microsoft likely will create unneeded customer confusion around Office 2003, say analysts.

"Buyers of non-Professional SKUs will need to carefully scrutinize the functional capability of the package they purchase to see if it truly meets their needs," Gartenberg said.