Microsoft Heads Into Cloud With Office 2010: Rich Jaroslovsky

Maybe Microsoft Corp. is finally getting the hang of this software stuff.

After years of problematic products that tarnished its reputation, and at a time when its model of locally installed software is under unprecedented assault from Web-based alternatives, Microsoft is showing a few signs that it may be able to respond to the mortal threats it faces.

First came last fall’s release of Windows 7, the clean, stable successor to the unlamented Vista operating system, which finally gives businesses and consumers a compelling reason to contemplate upgrading their existing setups. Now comes a new version of the company’s other great cash cow, Microsoft Office, which improves the world’s most widely used productivity software.

Office 2010, which goes on sale June 15, isn’t a wholesale overhaul of its predecessor, Office 2007. This is refinement, not revolution; the file formats remain the same, and most users who are content with what they can accomplish using the current version of Office have little reason to rush out for the upgrade.

At the same time, the new version does add scads of features to the suite’s core applications -- Word, Excel, PowerPoint and Outlook -- without burying usability in the process. And it positions Microsoft for the battle to come with archenemy Google Inc.

Web-Centric

That battle will play out across several fronts in coming months. Netbook computers running Google’s Web-centric Chrome operating system instead of Windows may start showing up later this year. Meanwhile, Microsoft continues to pour resources into Bing, the latest effort to dent Google’s massive lead in Internet search. But nowhere is the war likely to be hotter than in the battle for dominance in productivity software.

Google’s weapon of choice, its online suite of programs called Google Docs, is more than just competition for Office: It’s a direct threat to Microsoft’s entire philosophy. Google Docs is software as a service; both the programs themselves and your data reside in “the cloud” -- distant online servers --to be summoned as needed from any Internet-connected computer, and dismissed when you close your browser. And, in its basic form, Google Docs is free.

Microsoft Office decidedly isn’t free. The basic consumer version, called Home and Student, will cost $149.99; it includes Word, Excel and PowerPoint, but lacks Outlook, Microsoft’s e- mail and calendar program. The Home and Business edition, which includes Outlook, will list for $279.99; Office Professional, which also includes publishing and database applications, will go for $499.99.

The Big News

The big news about Office isn’t what’s in the shrink- wrapped package, though. It’s what’s on the Web: For the first time, Microsoft is offering Internet-based versions of Word, Excel and PowerPoint. These apps, like Google’s, are free. But unlike Google’s, they aren’t meant to be used in place of Office programs installed on your hard disk. Although they can be used without purchasing Office 2010, Microsoft has crafted them more as adjuncts to the programs you’ve paid for, facilitating online collaboration and mobile access to your work.

The 2007 version of Office marked a radical revamp of the software, introducing what Microsoft calls “the ribbon” -- customizable strips of controls that sit atop your spreadsheet or memo, changing when you click a tab corresponding with the general task you want to accomplish.

Preserving the Ribbon

Office 2010 preserves the concept of the ribbon, and even extends it to some places where it wasn’t before -- most notably Outlook, which also gains new ways to organize e-mail threads into conversations and hooks that allow it to be more easily used in conjunction with such social networking sites as Facebook and LinkedIn.

Still, the new Office incorporates some welcome changes. For instance, “File” is back. In Office 2007, that venerable menu item disappeared from the navigation, replaced in the upper left-hand corner with a shiny Office logo. It wasn’t readily apparent that you had to click the logo to access the old File options. You know, unimportant little commands like “New,” “Open,” “Save” and “Print.”

In Office 2010, the File option has been resurrected as a tab that takes you to a new area Microsoft calls “Backstage.” Here the traditional commands coexist with options to set permissions on who can do what to your document, check to make sure it is compatible with older versions and share it via e- mail, the Web or a server on your company’s network.

Pictures in PowerPoint

While new features have been added throughout the suite, users of the PowerPoint presentation software may notice the biggest changes. Microsoft has significantly expanded its picture-editing tools, making it less likely you’ll have to duck over to Adobe’s PhotoShop in mid-project to get those graphic effects just so. You can also now embed and tweak videos in PowerPoint slides, and can even broadcast your presentation over the Internet to viewers who don’t have the software installed.

The Excel spreadsheet, meanwhile, has introduced something called “Sparklines,” which are best described as mini-charts that reside within a cell and render small bits of data graphically. And Word even lets you recover unsaved versions of your documents.

Besides allowing you to save your work to your local hard drive, Office 2010 allows anyone with a Hotmail account or other Microsoft-issued ID to make use of “SkyDrive,” 25 gigabytes of free online storage. Once your work is stored in the cloud, you or whomever you designate can access it through a Web browser, using the new Office online apps.

Evoking Counterparts

These online versions of Word, Excel and PowerPoint are designed to evoke their locally installed counterparts without precisely duplicating them. They too make use of the ribbon interface, and if they lack the full scope and power of the paid Office programs, they provide more than enough functionality for most people. Documents created in the desktop versions of Office programs retain their formatting even if they’re opened and worked on in the online apps.

The big question for Microsoft -- and Google too, for that matter -- is just how users are going to want to use productivity software going forward. If the world remains PC- centric, Office 2010 will be a winner for Microsoft. If the cloud eventually supplants the desktop, the new Office Web Apps will still keep Microsoft in the game -- but that game will be a whole lot less profitable.

(Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net.

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