The Microsoft Office System: Turning Point or Point of No Return?

Office 2003 System is a means to further solidify Microsoft’s firm footing on the desktop by building connections to back-end infrastructure and applications. At the same time, it threatens to compromise many Information Technology (IT) organizations’ enterprise architecture decisions.

The Bottom Line: While collaboration and interoperability enhancements in Office 2003 will be welcome, the semblance of locked connections between expensive and hard-to-control clients and back-end infrastructure and data will compel many companies to reconsider Microsoft’s position in the enterprise.

The Office System as a Turning Point

To its great credit, Microsoft has done a worthy job of looking beyond integration of its Office products to the collaboration of the people that use it.

The general shift in Office is in connecting information workers together to aid collaboration. To accomplish this, the Office System--as opposed to Suite--connects desktops together with servers: The 2003 versions of Exchange Server and Windows Server include new collaborative capabilities and services. Meanwhile, SharePoint Portal Server acts as a portal interface for document collaboration, Live Communications Server offers real-time collaboration, and Project Server acts as a central location for managing projects.

In addition to productivity enhancements, Office standbys Word, Excel, and PowerPoint include new collaborative features to take advantage of these servers. Added are a couple of new applications, OneNote and InfoPath. An application for designing and publishing forms, InfoPath is the most explicit manifestation of Microsoft’s architectural shift in Office--support for Extensible Markup Language (XML). Here is a ton of potential for integrating office documents with business processes.

The Office System as a Point of No Return

We would be far from the first to criticize Microsoft for its proclivity to lock customers into one deal or the other. Undoubtedly, the Office System will leave at least a tinge of that taste in customers’ mouths. This is because, aside from more features that end-users won’t likely use, Office 2003 offers a little more that companies need without the collaborative features. And, for the most part, the collaborative features aren’t available without investing further in Microsoft infrastructure, if not in the direct form of SharePoint Portal Server, Project Server, and Live Communications Server, at least in updating to Windows Server 2003, Exchange Server 2003, and Active Directory Server.

Microsoft will also use its unparalleled marketing power to appeal to its audience, not simply by spending on the “Office System” and “Power of Potential” television campaigns. Microsoft gets far more airtime on users’ desktops. Workers that use the traditional Office suite won’t take long to notice (via menu selections and error messages) that they could be publishing and sharing documents on SharePoint Portal Server--if only they had it. An attractive price point, attractive enough to come in under corporate IT budgetary radar, won’t make it hard to get.

But power to the people is a two-edged sword for companies trying to exert control, not only of cost, but also citing security, legal issues around compliance, and the global inefficiency of highly distributed systems as pressing problems.

Conclusion: Microsoft is already using Office, most prominently Outlook and Exchange, as its avenue into enterprise applications. As a turning point, it offers what’s long been needed. The appeal of desktop-oriented enterprise applications is that they tend to foster adoption far better than corporate-driven, server-oriented systems, requiring less of an effort in training and change management. People will actually use them.

Still, while Microsoft’s encroachment into the enterprise applications market is certainly serious and may offer the greatest potential for growth, its primary effort is to ensure the longevity of its longstanding revenue generators, Office and Windows, on the desktop.

The threat comes with more organizations looking for ways to centralize their IT operations and development--to deliver all of their applications through secure, personalized portal frameworks rather than continuing to pay heavily for desktop overkill.

AMR Research originally published this article on 14 January 2004.