Users Weigh Cost and Benefits of Office XP

As Microsoft Corp. prepares for the launch this week of Office XP, the next version of its ubiquitous desktop suite, corporate users are weighing their options-and finding few.

As Microsoft Corp. prepares for the launch this week of Office XP, the next version of its ubiquitous desktop suite, corporate users are weighing their options—and finding few.

None of the traditional options—to upgrade for additional features, to sit tight or to switch to another platform altogether—satisfies all the needs of IT managers and users.

Many large companies with volume license agreements, for instance, are unhappy about Microsofts strategy to require upgrades to Windows 2000 and its insistence that customers sign up for the Redmond, Wash., companys new Software Assurance plan to avoid paying full price for future XP upgrades.

Still, some IT experts are recommending that clients running older Office 97 suites upgrade to XP.

"The older Office technology limits the innovations we can provide these clients in our solutions," said David Osborne, chief technology officer at Plural Inc., in New York, an application development and consulting company. "The inclusion of XML [Extensible Markup Language] and SOAP [Simple Object Access Protocol] as well as other protocols and data standards in XP allows us to be far more effective and creative with our clients."

But the greatest challenge for Microsoft may be to persuade those already on Office 2000 to take the plunge. "Microsofts greatest opportunity will be with Office 97 users, as XP is not a major upgrade for those already on 2000," said Jason Perlow, an IT consultant to a leading financial institution and an independent analyst based in New York.

Another option for customers not interested in upgrading now would be to switch to another product. But even then, given the lack of a viable alternative to Office, IT managers are restricted in what they can do. Contenders such as SmartSuite from Lotus Development Corp. and Unix/Linux offerings such as WordPerfect Office from Corel Corp. simply cannot compete with Microsoft Office.

"The fundamental problem with the Linux desktop and productivity suites is the lack of standardization. There are just too many Linux companies and too many diverse, scattered groups working on too many projects," Perlow said. "Their offerings lack the ease of use and polish of Office and Windows, do not offer the same level of functionality and, in many cases, lack cross-platform file compatibility. All of this works in Microsofts favor."

Osborne agreed. The Unix/Linux offerings are far less sophisticated than Office and lack the huge number of third-party applications found with Office and Windows, he said.

The management, training, support and compatibility costs associated with a migration from Office to a competing product are also so high that few large companies will seriously consider this, Osborne added.

Not helping matters is that the Linux desktop market is in disarray: Eazel Inc. has closed down, and MandrakeSoft Inc. recently underwent layoffs and a management reorganization, all of which does not help build corporate confidence in the platform.

Officials at Sun Microsystems Inc., based in Palo Alto, Calif., said they are hopeful that Microsofts licensing strategies and the hefty cost of XP upgrades will drive users to Suns StarOffice productivity suite.

But Sun officials also acknowledged that the lack of third-party applications written for the suite is a limiting factor and that significant user adoption may still be a ways off.

Ultimately, the best choice for users may be none at all.

Joel Salamone, senior director of technology at The Motley Fool Inc., in Alexandria, Va., said his 300 desktops all run Office 2000 and "the benefits of moving to XP are nonexistent. No threat of higher costs if we dont upgrade now is going to convince me to upgrade. Given the current economic conditions, my priorities are spending money on things that benefit our customers and our bottom line. Anything that doesnt help drive our revenue moves straight to the bottom of the list."