Microsoft on Monday said it will license the XML-based file formats used in the latest edition of its Office applications on a royalty-free basis.

The move is designed to give companies better access to documents that are created using Office 2003, the latest edition of Microsoft's desktop application suite. Microsoft said it is taking the action in response to requests from its software partners as well as from corporate and government customers who demanded a way to better interoperate with Microsoft's dominant suite of desktop applications.

The company's XML reference schemas for Excel, and the InfoPath forms application will be available starting on 5 December. WordprocessingML for Word, the XML schema for Word, will be available online on Monday.

Building XML data-labelling technology into its Office applications is a critical underpinning for Office 2003, allowing Microsoft to introduce advances around collaboration and digital rights management.

With the licensing programme, third-party companies or customers can incorporate the Office schemas into their own software and improve the interoperability with Office documents, according to Microsoft.

The Danish government is already using the XML schema in a project to standardise document formats to enable simpler data access. The initiative came about after discussions, Microsoft said.

Microsoft said it is using a World Wide Web Consortium (W3C) standard called XML Schema Definitions (XSDs) to publish the information. But unlike industry standards controlled by industry committees, Microsoft will dictate the development of the Office schema, noted Ron Schmelzer, an analyst at ZapThink.

"The challenge is that Microsoft is in control of the format, and so they retain control over the timing and nature of the changes to the format," said Schmelzer. "So any vendor that looks to support interoperability with Office 2003 will need to stay on their toes."

The move also allays some concerns expressed before Office 2003 was released that the XML-based Office file formats could only be read by Microsoft software. By publishing the schemas, third-party companies can now build software that will be able to read and write documents' Office 2003 file formats without a special add-on product.

"Fully opening up and licensing the Office 2003 schemas creates the first crack in the productivity suite's proprietary file formats," Jupiter Research analyst Joe Wilcox wrote in a Web log posting. "If data is truly is portable, as XML promises, then companies would no longer need to buy Office for compatibility of the file formats."