November 19, 2001 9:30 AM PST

Office for Mac: Strange bedfellows' baby

Office v. X for the Mac slipped into stores Monday, culminating a nearly five-year development effort by Microsoft.

The delivery of Office v. X has not been easy, requiring once bitter rivals Microsoft and Apple Computer to cooperate on major changes to Mac OS X, a product that arguably competes with Windows XP. The relationship between the companies in fact has changed substantially since January 1997, when Microsoft formed a Macintosh Business Unit (MacBU) to reignite its development of applications for Apple's Mac operating system.

"The relationship (with Apple), when we first started this business unit, was we could barely talk to each other without there being lawyers present," said MacBU General Manager Kevin Browne. "Things have changed so dramatically."

Apple and Microsoft tested the limits of their newfound cooperation earlier this year.

In March, Apple released Mac OS X, the most significant upgrade to the operating system since its 1984 release. With its Unix underpinnings, Mac OS X promised greater stability, better memory management and a more robust ability to run multiple programs simultaneously. Microsoft, like other software developers, recognized Mac OS X's promise, but also concluded that some changes would need to be made in order to allow the Redmond giant to move its applications quickly to the new operating system.

For Apple, wooing developer interest would be crucial to Mac OS X's success, because the new operating system was so radically different from its predecessors. While older applications work in "Classic" compatibility mode--essentially a Mac OS 9.2.1 environment running within the new operating system--they must be updated to take advantage of OS X's Aqua interface, improved performance and stability, and other features.

The version 10.1 upgrade issued Sept. 29 fixed many problems that troubled developers, also adding DVD playback and other missing features. Following the release of Mac OS X 10.1, developers unleashed a plethora of new applications, including Corel CorelDraw and PhotoPaint, Netscape 6.2, BBEdit 6.5 and Adobe Illustrator 10.

Browne praised Apple for putting aside old rivalries to work with Microsoft on making the changes necessary for Office v. X and other Mac OS X applications.

"There are 70-plus major feature additions and major fixes in functionality that happened between 10.0 and 10.1 that made it possible for us to ship the kind of product we wanted to ship," he said. "It's been impressive to see the two sides really focus on that product. We literally would not be shipping Office X now if we had not had that kind of access to the engineering staff from Apple."

My enemy, my ally
Much has changed since the August 1997 Macworld Expo in Boston when then interim Apple CEO Steve Jobs announced a $150 million investment from Microsoft, a new strategic relationship between the companies, and a five-year commitment for Mac Office. But Mac enthusiasts took the news badly, jeering the onstage Jobs and Microsoft Chairman Bill Gates, who attended via satellite uplink.

The Gatekeeper: Windows XP Much of the early tension between the two companies has given way to partnership. Microsoft remains the largest developer of applications for the Mac. MacBU employs about 160 people in the United States and 30 in Japan and Ireland. Besides Office, Microsoft offers Mac versions of Internet Explorer, Outlook, MSN Messenger and Windows Media Player. New versions of the latter two products ship with Office v. X.

MacBU works fairly independently from Microsoft's Windows applications divisions. Office v .X, for example, is not based on its Windows counterpart, although both share files seamlessly. The new Mac Office is completely designed around OS X, capitalizing on many of the operating system's advanced graphics features and Unix underpinnings. Some people think Office v. X even exceeds its Windows counterpart, Office XP.

"I've had an opportunity to play with Office for Mac OS X, and I really like it," said Technology Business Research analyst Tim Deal. "It's intuitive and aesthetically pleasing. People I've talked to who have had a chance to tinker with it a little bit think the Mac version of Office is much better than the Windows version. That's sort of the buzz."

Microsoft and Apple share a singular goal for Mac Office: wooing the professional market while making consumers more aware that the product even exists. Mac enthusiasts using Power Macs or the Titanium PowerBook are the most likely to be working alongside co-workers running Office for Windows. In fact, Microsoft estimates that about 60 percent of Mac Office users work in mixed Mac-Windows environments.

With the help of a $6 million marketing campaign, Microsoft will initially focus on selling Office v. X to early adopters of Mac OS X, many of whom are in the professional market. The company hopes to tempt Office 2001 and Word+Entourage users with a limited-time, $149 upgrade offer. The standard upgrade price is $299, and the full version is $499.

Microsoft also has found little or no awareness among consumers buying iMac and iBooks that a Mac version of Office even exists. At the least, Word or the Entourage e-mail client could appeal to those buyers.

Phil Schiller, Apple's vice president of worldwide marketing, agreed that there is an awareness problem.

"We're doing a lot of things with Microsoft, because there's a lot of people who don't even know there's a modern version of Office for the Mac," he said.

Microsoft estimates there are as many as 17 million active Mac users around the world, while Apple puts the number closer to 25 million. With only about 3.5 million of them--by Microsoft's accounting--running some version of Mac Office, the potential untapped market is huge. Still, that's a substantial decline from the estimated 8 million Mac Office users in August 1997.

To win this market, which still has a strong anti-Microsoft undercurrent, MacBU has worked to make Office as Mac-like as possible. Office v. X sports many features not found in its Windows counterpart that cater to the Mac community, such as OS X-style icons, floating formatting palettes and support for Apple's QuickTime video format.

This decidedly Mac approach has helped warm some of the chilly feelings toward Microsoft.

"I think there will always be some people that have that feeling, but I think generally we're beginning to turn that around," Browne said. "The kind of reception we get when we go in front of big (Mac) crowds is no longer hostile. It's, I hope, genuine respect for our efforts."

 

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