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Techguy
April 9, 2001, 08:01 pm
Office beats NetDocs in Microsoft ding-dong

By Peter Galli, eWEEK, and Mary Jo Foley, Ziff Davis Internet
eWEEK
April 6, 2001 12:02 PM PT

The fierce battle between Microsoft's powerful Office team and its fledgling NetDocs challenger is over, with the company's top brass christening Office the winner.
The battle pitted Microsoft Senior Vice President of Office Steven Sinofsky and his troops against Brian MacDonald, senior vice president of Subscription Services, and his forces.

Remember how one-time golden boy Brad Silverberg--who wanted Microsoft to make the Internet its platform, rather than Windows--lost out in a power struggle to Windows Group Vice President Jim Allchin? Well, it's déjà vu all over again.

As in the case of the Internet vs. Windows battle, Microsoft's powers-that-be have come down on the side of proprietary platforms, instead of on standards-based ones. And, according to a story in Friday's Wall Street Journal, the NetDocs team has been shifted to Office and MacDonald has abruptly decided to take leave from Microsoft for family reasons. (Microsoft watchers wryly note that taking family leave is basically the equivalent of tendering one's resignation.)

Microsoft officials were not immediately available for comment.

NetDocs is the internal code-name for the single, integrated application that Microsoft demonstrated at its .Net unveiling last June, and which was to include a full suite of functions, including e-mail, personal information management, document authoring tools, digital-media management and instant messaging.

Like Windows, Office is one of Microsoft's main cash cows, contributing 46 percent of the company's revenue and more than 50 percent of its income in the second fiscal quarter. It also enjoys more than a 90 percent share of the Windows desktop suite market.

But sales have been slipping, with revenue falling 2 percent in the second quarter year-on-year. Compounding this situation is that analysts expect corporate technology spending growth to slip to single-digit figures this year due to the economic slowdown.

Product hopes dashed?
While Microsoft officials have until now referred to NetDocs as "a set of technologies" rather than a product, sources close to the company said it had a sizeable team (believed to be around 400) working on turning this into a potential standalone product.

The hope was that the current alpha version could well develop into three versions directed at the consumer, small/midsize business and enterprise markets. But this is now unlikely, and parts of the technology will most likely simply become part of the features and updates of Office and other Microsoft product offerings going forward.

Sinofsky has long downplayed the NetDocs threat, saying it is a developing set of technologies that is evolutionary.

"We're not standing still, and we showed off some [NetDocs] technology at Forum 2000, which is the direction in which we're heading," he said recently. "We're investing in the ways that individuals create documents and manage information and e-mail and are trying to find new ways of doing that."

Office XP Lead Product Manager Tom Bailey has also previously said that NetDocs technologies would become available through a variety of different products that Microsoft releases over the next few years.

A .Net showcase

According to sources, NetDocs was designed to be Microsoft's showcase for many of its .Net technologies. Sources who claimed to have seen alpha versions of NetDocs running inside Microsoft described Netdocs as a single, integrated application that would include a full suite of functions.

NetDocs was expected to feature a new user interface that looked nothing like Internet Explorer or Windows Explorer. Instead, NetDocs was expected to deliver an integrated workspace based on the Extensible Markup Language (XML), where all of its application modules are available simultaneously. This interface was based on .Net technology that Microsoft, in the past, has referred to as "Universal Canvas."

"If you think of what a hosted version of Microsoft Office would look like, if it worked properly, you'd have NetDocs," said one source, claiming familiarity with Microsoft's plans.

However, sources say the Office team could continue to develop NetDocs as its .Net offering, making it available only as a hosted service over the Internet, rather than as a shrink-wrapped application or software preloaded on the PC. This slots neatly into Microsoft's .Net road map, which involves the delivery of applications and pieces of applications as services that can be rented over the Internet.

But while the NetDocs threat to Office may have abated, Office still faces a range of other challenges, the greatest of which lies in persuading current Office users to upgrade to Office XP.

Microsoft is also going to have an uphill battle convincing those users who have already moved to Office 2000 to pay for yet another upgrade. A Web developer in Houston, who declined to be named, said he has not yet seen anything compelling enough to convince him to upgrade anytime soon.

"Office 2000 is very robust and stable, and I plan to stick with it for quite some time," he said.

Analysts also expect just 5 to 10 percent of current Microsoft Office 2000 clients to upgrade to Office XP. Ken Smiley, an analyst for the Giga Information Group in Kansas City, said Microsoft's target market was going to be those users still on Office 97.

"More than 50 percent of the current Office users are still using 97," Smiley said. "I think XP may be compelling to them, and we should see a large number of them upgrade to XP over the next few years. But I expect a very small percentage--probably less than 10 percent--of Office 2000 customers to upgrade anytime soon."

ZDNET

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