A new Microsoft Office, a new Microsoft Office division

A look at the road that led to the choices Microsoft made with the coming version of its Office software and services.
Written by Mary Jo Foley, Senior Contributing Editor

What were they thinking?
With the coming version of Microsoft Office, codenamed Office 15, Microsoft is taking a cloud-first approach. This choice didn't just come out of nowhere. (And surprising to many, the germ of this cloud-centric thinking wasn't planted some time after Google launched Google Apps around 2006.)


(The new Lync screen coming with the Office 15 wave, courtesy of Microsoft. Click on image above to enlarge.)

The beginnings of Microsoft's push into online services in the Office division dates back to 2003/2004 , when the unit began investing in hosted services, including hosted messaging and conferencing. Post 2009, Microsoft changed its Office structure so that the Office and Office 365 development teams could work in tandem. Rather than develop Office client and Office server (SharePoint, Exchange and Lync) apps and throw them over the transom to the Online Services team to "Webify," Microsoft began involving both its cloud and on-premises teams in creating and building new features and functionality from the start of the Office 15 project.



(A timeline of the Microsoft Office team's Online Services history, courtesy of Microsoft. Click on image above to enlarge.)
"Our organization stepped back and said how do we evolve a business as big as this" with so many changes going on in the productivity space, said Janice Kapner, Senior Director of Communications with Microsoft's Office Division.
The team knew whatever ensued would be a major transformation for the Office business, impacting everything from how products were built and tested, to how they'd be rolled out to the channel, Kapner said. Other teams at Microsoft, such as the Windows Server/Windows Azure team and the Dynamics CRM/CRM Online team had undergone similar priority changes, and learned first-hand the difference between running a software business and a services business. The Office team has been discovering these same lessons, too.

Instead of delivering one big-bang release every two or three years, the Office 365 team was rolling out new features and fixes quarterly, if not monthly. Why not take that capability to consumers, and not just businesses, so as to insure they'd be on the most current release at all times?
"We are leading with services," Kapner said. "Even if you buy the traditional suite, it is cloud-connected and cloud-related."
In addition to navigating the software-services divide, the Office team has had to accommodate other shifting trends in the productivity space. The team has focused on what it means that people are moving across multiple devices, but want to keep their information in sync.  They also had to take into account the existence of a multigenerational workforce with different needs and expectations; new classes of devices working differently (like Windows 8); and the growing importance of the cloud and services, Kapner said.
In short, the Office team needed to find a way to strike a balance, Kapner said.
"We wanted the user experience to be contemporary, but not foreign," Kapner said."You can't afford to alienate a billion people" (the Microsoft Office installed base, according to Microsoft's tally).
Microsoft execs aren't yet ready to talk Office 15 packaging or pricing specifics. In fact, there are lots of specifics about all the different components of the next Office release that won't be disclosed in full today at the San Francisco Office 15 unveiling. Little will be shared on July 16 about the new Office Marketplace, for example, officials told me, though they will be discussing the Office 15 add-ons codenamed "Agaves," and now known officially as "Office Apps." Microsoft officials are planning to provide more deep-dive details on all the apps and services through August and into the fall, Kapner said.

Microsoft also won't be talking delivery dates today. But my sources -- who were right about the public beta of Office 15 hitting in July -- have said Microsoft's goal remains to release to manufacturing the final Office 15 client, servers and services before the end of calendar 2012, possibly around November.

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