XML in Office 12 Spells Third-Party Opportunity

Analysts predict that vendors and ISVs will capitalize on what may become a new "pseudo-standard," while developers scramble to update applications.

According to industry analysts and vendors, Microsofts decision to make XML-based file formats part of Office 12 documents will likely present new opportunities, and a few challenges, for third-party application and software vendors hoping to capitalize on the move.

The addition of XML formats is going to "have a tremendous effect on the third-party guys," said Bob Markham, principal analyst for Forrester Research Inc. in Cambridge, Mass.

"First of all, because its not a binary format anymore, it allows programs to treat these documents as active documents and update elements in a very straightforward fashion. Vendors are going to find all sorts of new applications for this," Markham said.

Additionally, any applications that drew from existing Office documents will need to be updated to handle the new format. Sue Feldman, a research vice president at IDC in Framingham, Mass., said she believes the change could lead to one of two results.

Either vendors will garner new business based on updating and converging those programs to handle the new formats, she suggested—or for larger enterprises in particular, it could delay the adoption of the format, which Microsoft Corp. has dubbed "Microsoft Office Open XML Formats."

/zimages/4/28571.gifRead more here about Microsofts decision to add XML-based file formats as a default to Office 12.

Microsofts decision to publish the format under a royalty-free license, as it did with Office 2003, will also allow vendors to more easily build on top of the schemas of Office 12 documents.

According to Microsoft, this enables vendors to "build solutions that provide universal access [to data] without needing Office applications and authoring tools." Microsoft said in a statement that more than a third of Office 2003 developers are in fact already using XML in their current applications.

"Even though the format is still owned by Microsoft, itll become a pseudo-standard," Markham said.

Feldman said she believes this is a logical extension of the more universal move to XML, which allows content to be manipulated and shared independent of the presentation. "Having a standard format, even if it is coming from one vendor, means its much more exchangeable between all the various platforms," she said.

Marc Horne, segment marketing manager for desktop products at Quark Inc. in Denver, Colo., agreed, noting that Microsoft is taking a similar approach to the one Quark has taken with the forthcoming Xpress 7.0, ensuring that XML is embedded throughout the file and is not just a "surface scraping."

"Im not entirely sure how open Microsoft will be, but I think this is an area where well see an interface between what Microsoft and Quark are doing," Horne said. "Because its all open, any organization can interface, by themselves, between the two technologies, without insider knowledge."

/zimages/4/28571.gifClick here to read more details on Microsofts upcoming Office 12.

In addition, the format will allow systems and applications to access, update and query documents without manual intervention, which could be a boon for worker productivity and vendors developing new applications to take advantage of the format.

"Reformatting, retyping and rekeying data are tremendous time sinks which cost enterprises millions of dollars every year, so being able to move data among the applications is extremely important," Feldman said.

"On the other hand, this is going to cause all kinds of problems on the compliance side," Markham said. "Because programs can now work on the format and update documents without human interaction, theres going to have to be very close control over the auditability of what happens to those documents."

Office 12 will not be available until the latter half of 2006, and Microsoft plans to begin discussing details of the new format at TechEd next week in Orlando, Fla. Analysts say they believe that should be sufficient time to allow developers to familiarize and adapt their applications, but it wont be immediate.

"Theres always a learning curve," said IDCs Feldman. "Theyll have to rewire things in order to take advantage of this; theyre going to have to do some development of their own. Itll take awhile."

Markham agreed: "Its not a lot of time, but I can assure you that the vendors will make it a top priority."

For its part, Microsoft said it is making Office 12 backward-compatible in order to keep third-party applications based on current Office documents interoperable with the new format, as well as to avoid problems users experienced migrating to Office 97.

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