• Sidebar: Jeff Raikes on the Office Business Strategy
• Chart: What's in the Office System?

Microsoft has launched the Office System, a new brand applied to client applications (including the Office suite), server products, and other offerings, most of which come from Microsoft's Information Worker business unit. (See the chart "What's in the Office System?".) The term Information Worker effectively means any business computer user. It not only applies to one of Microsoft's seven business units but it also summarizes a major part of Microsoft's strategy to significantly expand that unit's US$9 billion business, currently dominated by sales of the popular Office suite. The strategy, if successful, could pay off both for customers who adopt the products and partners that sell solutions built on the products.

Reinventing the Office Business

The Information Worker strategy has three facets:

• Secure existing Office customers by helping them use current products more effectively in their business processes (the mission of the company's 400 Business Productivity Advisers in the field)
• Expand the customer base beyond current Office users to all information workers by delivering new capabilities for collaborating with coworkers and carrying out specific business processes
• Enlarge the business beyond Office to additional client applications, servers, and online services.

(See the sidebar "Jeff Raikes on the Office Business Strategy".)

The 2003 Office System product releases address the second and third facets of the strategy. The products are designed to be useful components of custom solutions created by developers for specific business tasks, such as preparing job advertisements or evaluating insurance claims. This new versatility is meant to expand the customer base from current Office users to all users of such custom solutions. In addition, the products include a set of new or upgraded client applications, servers, and online services which the company hopes will improve collaboration tasks, such as group document revision.

Microsoft Project exemplifies what the company is trying to do with the Office System. Project started out as a stand-alone application to plan projects and track their status. The individual user, typically the project manager, planned the project and maintained schedules and status virtually in isolation from the larger project team.

Beginning with Project 2002, however, Microsoft introduced an Enterprise Project Management Solution based on Project and a complementary server product, Project Server. This Solution enables project team members to collaborate with the project manager, update their own status, and enter related data such as timesheets. The Solution also enables senior managers to collect data across multiple projects, to track project status across an entire enterprise, and it helps project managers to search across the entire enterprise for specific types of workers and resources.

The result: Project's audience has expanded beyond project managers to senior management and line workers, and the Enterprise Project Management Solution has become an important platform for partners, such as systems integrators and vertical ISVs. This expansion has helped Project grow to more than US$500 million in revenue annually. Microsoft now hopes to repeat this success with the Office suite and other Office System offerings.

Evaluating Office in Systems

For Microsoft customers, the Office System wave of products could offer important improvements in the way users communicate with one another and create and share documents. In particular, products in this wave could do the following:

• Make e-mail more accessible and reliable for mobile users and simplify its management for administrators
• Make group authoring of documents less error-prone, and make distribution of documents to team members more efficient and secure
• Simplify access to corporate data and improve support for mobile and other offline users in custom and vertical applications.

However, customers must evaluate the Office System differently than they might have in the past. As stand-alone applications, Word, Excel, and PowerPoint have changed very little in their 2003 versions. What has changed is that these applications are now more useful as client components for collaboration and for custom solutions that support specific business processes. So to evaluate the Office System, organizations need to evaluate entire solutions, and then consider how rolling out the Office 2003 suite and other Office System client applications will improve the solution's payoff.

What's Ahead

This report is designed for Microsoft partners and customers evaluating the Office 2003 suite, related Office System client applications and servers, and new Windows Server features that integrate with them. The report outlines improvements in Office 2003 for four specific types of solutions:

• E-mail and group coordination with Outlook 2003 and Exchange Server 2003
• Document sharing and document management with Office 2003 and Windows SharePoint Services (a new feature of Windows Server 2003)
• Custom solutions created by developers that use Word 2003, Excel 2003, or the new InfoPath application as "smart clients" to access XML data sources
• Controlled document sharing with Office 2003 Professional Edition and Windows Rights Management Services (also supported by a new feature of Windows Server 2003).

For each of these solutions, the report outlines what the solution is, how it might benefit an organization, and how Microsoft's products work together to deliver the benefits. The report also identifies how the Office suite applications stack up against alternative clients for a specific solution. Finally, for each solution, the report identifies important limitations, potential problems, and future technology directions. Appendix A outlines the licensing requirements and base pricing for each type of solution.

This report does not provide a complete listing of new features in the Office 2003 suite or other Office System applications. It also provides only an overview of document sharing with Windows SharePoint Services, and of e-mail and collaboration with Exchange. Readers should see the Resources chapter for additional sources of information, as well as the following Research Reports:

"Exchange Server 2003, Outlook 2003 Enhance Mobility, Scalability, Security" (July 2003) provides more details on new features of Microsoft's e-mail and collaboration solution.

"Collaboration and Portal Strategy Built on SharePoint" (Sept. 2003) provides more detail on document sharing and document management with Windows SharePoint Services, as well as corporate portal hosting and management with SharePoint Portal Server.