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Should you upgrade to Office XP?

Office XP will soon be in town. So, the question of the day would be,should you be upgrading to Office XP or stay with what you have?Read on to see what we have to say.

Small businesses managing their livelihoods with PCs overwhelmingly turn to software suites for the guts of their productivity libraries: word processor and spreadsheet, and to a lesser degree e-mail client, scheduler, and presentation maker. Microsoft Office has a stranglehold on the suite market, outpacing competitors like Corel WordPerfect Office and Sun's StarOffice by so much that there's really no competition.

Microsoft releases its newest business productivity suite, Office XP, on May 31. How do you know whether the new Office is a must-have upgrade? I've identified four strategic factors that I think should influence your decision about Office XP. (If you want to know about the nuts and bolts of Office XP, check out the review on ZDNet.)

YES

Pick a configuration
First, think about what version of the Office suite might suit you best. Microsoft's best value, Office XP Small Business, which includes Word, Excel, Publisher, and Outlook, is available only as one of two suite configurations pre-loaded onto new computers (the other is Professional with Publisher). If you want to buy Office XP separately, you have just these three choices: Standard (which includes Excel, Outlook, PowerPoint, and Word); Professional (which adds Access to Standard); and Developer (which adds FrontPage to Professional).

I've long said that Publisher is a more valuable player than PowerPoint for small businesses, so Microsoft's move to strike a Small Business package from the retail mix is a bad one. Under the circumstances, Standard is the best for small businesses upgrading or buying at retail. If you frequently need to churn out paper materials--newsletters, brochures, that sort of thing--I think the US$100 or so for a stand-alone copy of Publisher is a bargain. If we can agree on that, let's move on to the other factors to consider.

Check out the price
Office XP's not cheap. When you factor in the now-missing rebate that was included in the last two editions of Office, Office XP costs about US$30 more than did Office 2000. Here are Microsoft's prices:

Office XP pricing
Version Upgraders New Users
Standard US$239 US$479
Professional US$329 US$579
Developer US$549 US$799

If you buy through an online discounter, the price should be a bit less for Standard--figure about US$200 to upgrade and US$430 for new users.

Microsoft has also eliminated competitive suite upgrades--users of, say, WordPerfect Office must fork over the full price if they want to switch. Office 95 users can't upgrade, either--the only way they can get Office XP is to pay the new user price. In both cases, the news to affected small businesses is more or less moot: most WordPerfect users would rather be flogged than pay into Microsoft's coffers, and Office 95 users stayed with that suite because their PCs can't run newer Office versions without massive hardware upgrades.

Last year, paying a grand to upgrade the primary software on five PCs wouldn't have raised a lot of small-biz eyebrows. This year's different, what with a dicier economy and fuzzier outlook for the future. For most small businesses, the cost, more than anything else, is the most important factor when deciding whether to upgrade to Office XP.

Credit Microsoft with remembering the debacle of 1996, when the newly-released Word 97 stumbled over file format compatibility. Since then, Redmond's been sufficiently spooked to stay with the same file format for its three primary applications: Word, Excel, and PowerPoint. Thus your workers can share Word, Excel, and PowerPoint files as long as everyone's using Office 97, 2000--and now, XP.

Naturally, there are differences between the three versions of Office apps, but that doesn't prevent an older edition from opening a newer one's documents. Features present only in the newer versions, such as markup balloons or advanced table formatting, don't appear when you open the document in an older version. Word 2002 (the name of the version in Office XP) even lets you disable features not available in earlier editions when you save a document, so that it looks the same no matter which Word you use.

Office XP applications can save files in formats earlier than Office 97, and you can equip older Office suites with translators and converters so that they can open Office XP's documents. Download the Office Converter Pack, a monster 13MB file, if you want to open Office 97-XP files from within Office 4.x and Office 95 applications.

Backwards compatibility with older versions of Office is one thing that XP has going for it. If you bring Office XP into the shop in small stages--for example, if it comes in only with new PCs--it won't cause any real problems.

There's a brouhaha brewing about the new anti-piracy policy that Microsoft's implementing in Office XP. Simply put, the new policy puts a crimp on casual piracy by requiring you to "activate" Office XP within the first 50 times you launch one of its programs.

Activation, which can be done by phone, fax, mail, or online via the Net, takes an aggregate "fingerprint" of the PC's hardware (although not an inventory of individual components or the hard drive), and feeds the information back to Microsoft. In return, you're given a code that "unlocks" the suite. Each copy of Office allows no more than two installations:--one on a desktop, for instance, the other on a laptop.

Lots of people are raging about this on ZDNet's TalkBack, saying they'll never pay for Office if they can't make unlimited copies, as if the phrase "open-source" should apply to all software. But the real beef is the hardware tie-in-- what if you have to re-install Office after reformatting the hard drive or migrating to a different machine? Users will have to call a toll-free number and tell their story to a rep, who will decide whether to provide another activation code. Microsoft says that if additional installations and activations are legit, it will grant them easily and quickly. The best place to read more about activation is on the Microsoft Australia Web site--this anti-piracy practice has been used Down Under for more than a year.

I applaud activation in theory--I'm the last one to advocate piracy, and Microsoft has a right to profit by its labors, just as my business does, and yours, so I'll reserve final judgment until Office XP is released and I can try out the whole activation process myself. But here's my initial impression: it's an unwieldy process at best, embarrassingly intrusive at worst. The idea of having to plead my case over the phone because I've reformatted my PC--something I do at least once a year with older Windows 98 systems--sounds as pleasant as an IRS audit.

Industrious thieves will eventually circumvent such activation--in fact, some pirated copies of Windows XP have already surfaced. But many who have been scamming Office on the side will be nudged, if not forced, into going straight. No longer will you be able to update Office on each machine in your business from one just one paid-for CD-ROM.

The only real alternative to activation is to skip Office XP, but I don't think WordPerfect Office and StarOffice are a credible substitute for Microsoft Office. Choosing a second-class application suite over an Office upgrade seems to me a lot like cutting off my nose to spite my face.

Do Office XP's capabilities outweigh its high price? If you went to the trouble of upgrading to Office 2000 within the last two years, then no. In all likelihood, you've just gotten comfortable with 2000's applications, and no individual XP component has an overriding advantage over its predecessor. Collectively, I have a lot fewer complaints about XP than I did about 2000, but from this judge's bench, that still doesn't make a case for upgrading. Skip XP and use what you've got.

Office 97 is a more legitimate target for upgrading. This is the group Microsoft is aiming at, say analysts (such as Giga Information Systems, which offers a PowerPoint presentation on Office XP migration), since it represents about half of all installed Office suites. Office 97 offers pathetically weak Web and collaboration features; if your business would benefit from better collaborative conditions--sharing documents with outside consultants or freelancers, for instance--or you want to publish Office documents on your Internet or intranet site, consider Office XP. In the end, I can't quite come up with a solid, no-fault reason why small businesses need Office XP. Consider upgrading, but take into account your own situation.