Microsoft Says Next Office Suite Will Go on the Web

LOS ANGELES(Reuters) – The next upgrade of Office business software from MicrosoftCorp will include a version that edits word processing documents andspreadsheets inside a Web browser, the software maker said on Tuesday.

The online version of Office, which includes the Word and Excelprograms, aims to prevent competitors such as Google Inc from peckingaway at Microsoft’s dominance in software used by office workers, andexpand the market for one of its most profitable products.

Microsoft would not comment on when it plans to release the nextversion of Office, dubbed "Office 14," but in the past it has shippedan upgrade every two to three years. It introduced the current Officesuite of programs in January 2007.

The company said Office Web applications will offer lightweight,online versions of Word, Excel, PowerPoint presentation software andthe OneNote collaboration program. Office files can be managed andedited on a normal desktop computer, a Web browser or a mobile phone.

Microsoft, the world’s largest software maker, has seen a wave ofcompetitors from Web start-ups to Google offering word processing,presentation and spreadsheet software over the Internet for free withadvertising or a monthly subscription.

Google Docs offers spreadsheets, word processing, and presentation software over the Internet as a free service.

"Nobody, none of our competitors, will do as good of a job on thephone, the browser or the PC," said Chris Capossela, a senior vicepresident at Microsoft’s Office business.

The company announced the news at the Professional Developer’sConference, Microsoft’s annual gathering of engineers to detail thecompany’s future plans.

Microsoft has mostly resisted the push to make its Office suiteavailable online, choosing to sell licenses to run the applicationslocally on a single computer. It allows users to share files throughOffice Live, which is free with advertising or available with morefunctions for a monthly subscription.

In the September quarter, Microsoft’s Office business division wasthe biggest revenue and profit driver, outgaining even itsbread-and-butter Windows unit.

In the previous fiscal year, the Office unit generated $18.9 billion in revenue and $12.4 billion in profit.

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Microsoft said the new Office Web applications will be available forconsumers on Office Live, although it did not disclose whether it wouldbe paid for by advertising or subscriptions.

For large corporate customers, they can either pay for a license torun those applications online using their own computer servers, or runthose programs in Microsoft’s data centers for a monthly fee.

Microsoft said users will be able to view Word documents or Excelspreadsheets in the same way regardless of whether they are using a Webbrowser or on a standard desktop. The online Office version also has asimilar look and feel to the desktop applications, albeit with lessfunctions.

The new Office Web applications will work on Internet Explorer,Mozilla’s Firefox and Apple Inc’s Safari browsers. They will beavailable for a technical preview sometime this year, according toMicrosoft.

Capossela sees the applications expanding the base of Office users,notably employees who don’t work on a computer sitting on a desk –nurses, truck drivers or factory workers — but require some businesssoftware accessible over the Web.

It also offers, Capossela notes, the opportunity to make money inthe form of advertising or subscriptions for a software product that isheavily pirated.

"We have a huge number of users. Very few pay us. There is a hugeopportunity for us in this space because we can get revenue from peoplewe are not getting anything from," said Capossela, who did notelaborate on the effect the new service would have on Office’s profitmargins.

(Editing by Derek Caney)