It's hard to get excited about Microsoft's 20-year-old Office desktop applications, which seem to get less interesting with every nifty new Web alternative. Alongside Google Search, AOL Instant Messenger, and Apple iTunes, Office seems like the stodgy chaperone on a field trip to software's future.

Microsoft must transform its cash cow--Office is second only to Windows in profits generated for the company--to stay relevant in this day of Ajax-developed light and friendly apps. Office must become more things to some people--it lacks blogging tools, for example--but less to those who want the flexibility of browser access to software services.

	Not bored by Office's profits Photo by Brendan McDermid/Reuters/Landov

Bill Gates this week will explain Microsoft's plan to do both of those things. At the annual Office developer's conference at Microsoft's Redmond, Wash., campus, Gates will make his pitch for Office 2007, the first big upgrade to the line in three years, due to ship in the second half of this year. Microsoft already has sketched out Office 2007's new features and packaging options. Next comes the harder part: getting developers to work with the software, IT managers to buy it, and workers to actually use the stuff.

Microsoft's chairman will use the developer gathering to tout Office 2007 as a full-fledged applications environment that surpasses any alternatives in the areas of comprehensiveness, scale, and search. Despite all the buzz around Internet-based apps, Gates will make no apologies for the fact that Microsoft still offers Office in the old client-server model with 15 refreshed desktop applications--Excel, Outlook, Word, and the rest--and five new and updated servers. "There are a lot of reasons why people run applications inside their corporations--in terms of resource management and security and integration," Gates said in an interview last week in his Redmond office.

Microsoft promises to fill some gaping holes in Office. The omnipresent Excel will be offered for the first time in a server version that brings central control to all those spreadsheets zapping around the workplace, a must in this era of tighter financial controls. "There's been a lot of demand for server-based Excel," Gates said, shrugging off a question about why it took Microsoft so long to deliver.

Microsoft also will offer blogging and wiki tools for the first time. They'll be built into Windows SharePoint Services, a middleware layer within the Windows Server 2003 operating system and, when available next year, Longhorn Server. Microsoft's blogware will come with access controls that make it possible, for example, to block outsiders from internal blogs or invite them to participate, Gates said.

The revitalization of Office hinges not just on the client applications running on 400 million PCs worldwide, but on a handful of revamped servers that inject added functionality. There's a server for central management of electronic forms, one for managing business projects, and another based on Groove collaboration software. The vari- ous pieces add up to what Microsoft officials call a "system" of products designed to work together; it's the kind of tight integration that has been known to get Microsoft into anti-competitive trouble when it comes at the expense of products from other companies.