XDocs, according to Microsoft, will make it easier to create richly formatted online forms, and to simplify the collection of form data. Because it uses XML, XDocs form data should integrate with a variety of data repositories with relative ease.
The first reaction from tech pundits was to proclaim that a mortal blow had been struck against Adobe, the PDF file format, and Adobe's Acrobat family of PDF manipulation products. Adobe's stock took an immediate hit, and some analysts went so far as to compare Adobe to erstwhile MS competitor Netscape.
It's a bit premature to be ringing alarm bells for Adobe, though. XDocs will be a strong challenge to certain facets of Acrobat, but there are significant differences between the two products, and where they are similar, Adobe is in a position to put up a good fight.
XDocs's obvious challenge to Acrobat is in the online forms market.
In that narrow field, it's clear why XDocs is perceived as a threat: Forms, by their nature, require a client and a server. Between their virtual lock on the office productivity suite market and the popularity of SQL Server, Exchange, and the rest of the .Net server products, Microsoft can address both sides of the forms equation.
While PDF forms can be integrated with backend sources like SAP and PeopleSoft, XDocs forms will be able to do this as well, according to Microsoft, and if XDocs is deeply integrated into Exchange and other .Net server components, as it most likely will be, Microsoft will have a significant selling point.
While Acrobat Reader may be everywhere, it's safe to say that it probably isn't used as often as Office, and Microsoft could gain an advantage in the forms market simply by producing a well designed, easy-to-use product with a user interface that's familiar and inviting to people who already use the other Office products regularly. Adobe's defense against this has been to make it possible to create PDFs from any application, including Office. How these differences will work out competitively remains to be seen, and depend on how well XDocs is executed, and how well both Adobe and Microsoft educate potential customers.
But it's important to remember that most people don't use PDFs for online forms--in fact, many people aren't aware that they even can be used for that purpose. The most common use of PDF is to securely distribute documents that can be viewed and printed consistently across different platforms. XDocs, judging from Microsoft's announcements to date, doesn't address these features, and for the foreseeable future Adobe has this market to itself. What this means is that XDocs is unlikely to take market share away from PDF--what Microsoft appears to be trying to do is limit the growth of PDF, because PDF's true strengths in secure document distribution and printing remain unchallenged.
Well before the XDocs announcements, though, Adobe was expanding the forms functionality of PDF.
"PDF is evolving beyond a document format, and is now a rich information container," according to Julie McEntee, Director of Product Management for Adobe. As part of that effort Adobe recently announced a new, more forms-friendly version of Acrobat Reader, and beefed up its line of PDF server products. And PDF has supported XML for a number of years.Because it's a relatively nascent market (both Microsoft and Adobe probably face the stiffest competition, in terms of market share, from plain old HTML forms), the battle for online forms creation could go either way. While the Microsoft advantages have been stated, Adobe has a mature product (PDF and Acrobat were introduced in 1993) that's already on a lot of desktops, and it's a multipurpose piece of software--cash-strapped IT managers aren't likely to spring for another application for forms creation if they already own Acrobat for other purposes.
Which brings up the issue of pricing. Though the cost of XDocs hasn't been announced, it's likely that Acrobat will have a pricing advantage. Office, which will include Xdocs, is expensive--list price for the full version is $580--and this is unlikely to change, since Office is Microsoft's cash cow, generating one third of the company's revenues. In fact, under recent changes to their licensing programs, the cost of Office has gone up for enterprise customers, in some cases dramatically. The pricing issue with new versions of Office, in fact, may slow the upgrade cycle for Office 11, giving an incentive for users or companies that are reluctant to upgrade to 11 to rely on Acrobat for forms.
XDocs may be available as a standalone application (Microsoft hasn't decided yet if it will be standalone or bundled with Office), but according to Microsoft spokesperson Catherine Brooker, the full version of XDocs will be required in order to use XDocs forms.
In comparison, the full version of Acrobat costs $250. But as noted above, other programs can be used to create PDFs, and the Acrobat Reader is free and ubiquitous--Adobe says that over 400 million copies have been distributed.
Microsoft and Adobe have gone head to head in other fields, including Web page creation, font technology, and--in an instance more relevant to the XDocs versus PDF discussion--eBooks. The Adobe eBook products are PDF-based, and they are more than holding their own against Microsoft's eBook format--downloads of the Adobe eBook reader have increased 70 percent this year, according to Adobe, and Adobe recently introduced Content Server 3.0, which helps libraries manage distribution of eBooks.
Of all these points, by far the most significant is that PDF and Acrobat are mature, shipping, and in wide use, unlike XDocs, which isn't expected to ship until midway through next year, and will probably require at least another iteration to work out the 1.0 kinks.
And that's a huge advantage.
In fact, Bill Gates may have said it best: "Once a format gets established, it is extremely difficult for another format to come along and become equally popular." That bit of wisdom was from his famous "Tidal Wave" memo of 1995. If you have a PDF reader, as you almost certainly do, you can see it yourself here.