December 1, 2003 4:00 AM PST
What's behind Microsoft's Office moves?
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Microsoft announced that starting Dec. 5, customers and partners will be able to view the unique Extensible Markup Language (XML) dialects, or "schemas," used by three of the most common Office applications: Word, Excel and InfoPath.
Microsoft has made extensive XML support one of the key selling points for Office 2003, with the widely adopted standard promising more fluid exchange of data between Office documents and enterprise computing systems.
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Michael Gartenberg, an analyst at Jupiter Research, said such concerns became more widespread once the software hit the market, and Microsoft had to respond.
XML is fast emerging as the preferred means of formatting data delivered in back-end business processes or Web services. But unlike Hypertext Markup Language tags, which are universal, XML tags can be customized by developers, and they need to communicate with software that reads them. The XML tags that define the elements of a document are collectively called a schema.
Competitive and regulatory pressures played a role in Microsoft's decision to let customers and partners view the unique XML "schemas" in three Office 2003 applications.
Microsoft customers will gain access to the sophisticated formatting and organizational information included in Office documents. But competitors will also be able to get a look, which could pose a challenge to the software giant.
"I think it became a question of concern among the customers that the XML support was there, but if you didn't have the schemas, that was kind of limiting," Gartenberg said. "The real question is why they didn't take this approach in the first place. I think they just didn't really anticipate this kind of reaction."
Alan Yates, senior director of business strategy for Microsoft, said the XML decision was largely based on customer feedback. Office 2003 is a complex product, he said, and it took some time to realize how useful schema access could be to customers and partners.
"We went through a long beta period...and it's just now that we're documenting and publishing the results of all that feedback," he said. "After the product ships, you start to peel the onion back on various solutions customers are trying to build with it."
Full XML openness poses some competitive challenges, Yates acknowledged, including the ability for other software makers to build tools that can open InfoPath electronic forms, which for now are accessible only through the InfoPath client. But the benefits of broader support for Office applications outweigh any risk, he said.
"There are already lots of third-party (software makers) working with InfoPath, and this will just accelerate their work," Yates said. "The benefit to us in terms of having lots of complementary software outweighs the disadvantage of having lots of so-called clones."
"We believe our products are innovative and valuable enough to business that they stand on their own," he added.
While Microsoft will make available the underlying Office schemas, the company will retain control over how those schemas are developed in the future. That puts the burden on competitors to keep up with Microsoft's changes.
Stephen O'Grady, an analyst for research firm Red Monk, said it's worth noting that the XML announcement was prodded by negotiations with the government of Denmark. He said pressure from governments, particularly in Europe, is prodding Microsoft to take a more whole-hearted approach to embracing open standards, including XML. O'Grady noted Microsoft's ongoing negotiations with the European Union.
"If you look at the back-and-forth going on between Microsoft and the EU, that's a good indication of what's happening with Microsoft and standards," he said. "The EU has been very clear that they're focused on interoperability and standards. That's an indication of some of the pressure that is out there for Microsoft."
O'Grady added that governments, particularly in Asia, have been among the most significant adopters of open-source software such as Linux and the OpenOffice productivity package, a direct competitor to Office that includes full and open XML support.
"Just in terms of volume worldwide, we see a lot of traction in some areas for Linux desktop software and alternative productivity suites," he said. "We are seeing some inkling abroad that people are really starting to push back, and I think ultimately Microsoft is feeling some pressure."
Rob Helm, an analyst for researcher Directions on Microsoft, said software publisher Adobe Systems may be seen as a more significant long-term threat by Microsoft. Adobe's push for businesses to broadly use its Portable Document Format to store and exchange business data could undercut the value of Office applications.
"Microsoft is fighting to keep Office as the standard archival format for documents...and Adobe has begun to give Office a little bit of a scare on that front," he said. "If companies were to standardize on PDF, Office would become just one PDF authoring tool among many. It's a very long-term potential threat, but Microsoft can afford to look several steps ahead."
Open XML support in Office helps counter any PDF threat by allowing free interchange of data between Office documents and back-end systems and by encouraging customers and partners to build services around Office, Helm said.
"Anything they can do to make Office a better archival format helps in that regard," he said. With the schemas, "you can feed Office documents into XML content management systems or use XML tools to categorize and scan documents."
Helm sees Microsoft's overall enthusiasm for XML as genuine and part of a wide industry trend toward supporting the standard.
"XML is one area where Microsoft hasn't had to be pushed," he said "They realize that if XML takes off, it expands the market for their products so much, it'll outweigh any possible competitive disadvantages."Microsoft has been instrumental in establishing XML as a Web standard, and, along with IBM, has been a vocal supporter of XML for Web services application development.
"All of the vendors see more money for themselves if XML takes off. (XML) makes it easier to interconnect systems," Helm said. "That's more important to them than gaining any proprietary advantage, at this point."