Last Tuesday, Microsoft officially launched Office 2003, the long-expected upgrade to its desktop productivity suite. In the process, the software giant declared its intent to make Office the hub that connects workers with each other and their enterprise applications. That declaration holds significant implications for medium-size companies in general and iSeries owners in particular.

With Office 2003, Microsoft is trying to meet a different set of customer needs than it did with previous versions. Historically, Microsoft's primary objective for Office was to make individual workers more productive. This led the company to add hundreds of features--many of which are used by only a fraction of workers--to wring out incremental productivity gains. Today, however, Microsoft executives acknowledge that they have reached the point of rapidly diminishing returns with this strategy. From a personal productivity standpoint, Office has achieved nearly as much as it can achieve. As such, Microsoft cannot expect customers to keep upgrading their Office suites unless future versions do more than automate the desktop.

For Microsoft, Office 2003 represents a major step beyond personal productivity. While the software package targets some new features at individual workers, most of its enhancements are designed to increase the productivity of workgroups and entire companies. The suite accomplishes this objective in two major ways. First, it uses Extensible Markup Language (XML) to organize information locked in "desktop silos" and make it accessible to workgroups and enterprise applications. Second, it integrates with Microsoft server-side products that support workgroup productivity, such as SharePoint Portal Server and Live Communications Server.

XML--Microsoft's Secret Integration Sauce

Office 2003 uses XML as the primary mechanism for building information bridges between individual desktops, workgroups, and the wider enterprise. Unlike Office XP, which could only save and open XML documents, Office 2003 uses XML to actively structure, constrain, and validate data elements within documents. The suite also uses XML to share information with other Microsoft applications and any other software that generates XML data.

To show how these capabilities work, let's consider how many companies collect monthly expense reports from employees: via Excel templates that they fill out and email to their managers. Today, getting that information into corporate financial systems frequently involves many manual steps, including validation and rekeying. With Office 2003, however, a company can bind an XML schema to an Excel template that validates all expense entries and then formats them for immediate access by financial systems. Moreover, developers can write XML-based Excel applications to retrieve expense data from financial systems for review by controllers and CFOs.

If there is one Office 2003 application that exemplifies these capabilities, it is a new one known as InfoPath 2003. While the new XML capabilities in Excel, Word, and Access require considerable skill to use, InfoPath lets users create XML-based forms without having to understand the underlying technology. These forms can gather, validate, and format data from both employees and applications and then pass that data to other XML-compliant applications. This allows InfoPath to function as a workflow engine when coupled with the appropriate server-side software.

While XML makes Office 2003 a more-effective platform for collaboration and data sharing, it also increases the risk that sensitive data will fall into the wrong hands. To protect against this, Office 2003 includes Information Rights Management (IRM), a new feature that allows users to define at the file level who can access, copy, forward, and print documents. Administrators can define these rights for individual users as well as for groups.

Not Just a Suite, but a System

While Office 2003 is a desktop suite, it extends beyond the desktop to integrate at deeper levels with Microsoft's server products. The primary goal of this integration is to enhance the suite's collaboration and workflow capabilities. To achieve this goal, Office 2003 features integration with several server products. One of these, Live Communications Server 2003, provides instant messaging and real-time information sharing services within corporate firewalls. Another, Windows SharePoint Services, is a facility in Windows Server 2003 that creates an environment for document-based collaboration. Workgroups can use Windows SharePoint Services on a standalone basis or extend it with additional features found in SharePoint Portal Server 2003.

Besides integrating with these server products, Office 2003 also features tighter integration with Exchange Server 2003, Project Server 2003, and client-side products such as FrontPage and Visio. To highlight the integration between Office 2003 and these products, Microsoft refers to them collectively as the Office System. Given the growing bonds between Office and Microsoft's server products, that title is increasingly appropriate.

To Upgrade or Not to Upgrade?

Taken together, Microsoft's Office 2003 and Office System could significantly boost the productivity of workgroups and break down the barriers between desktop and enterprise applications. However, those capabilities come packaged with weaknesses and risks that you should assess before deciding to upgrade. I'll weigh the promises of Office 2003 versus its perils in a future article, so stay tuned.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology.

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