Mollifying The Paper-Pushers Could Benefit Microsoft's Business Customers, Too

Microsoft never relinquishes control easily; this time, it buckled to the bureaucrats. But its decision, related to its upcoming Office 12 suite, should help customers, particularly those that want to customize Word, Excel, and PowerPoint.Microsoft will submit its Office Open XML--the format for files created in Office 12, due late next year-to Ecma International in Geneva for ratification within a year or so as an industry standard. It's not a first-parts of Microsoft's .Net Framework have been approved by the group. But in doing so, Microsoft gives up unilateral control over how Office documents work. The European Union wants Microsoft products to be more interoperable with other companies' software. And the state of Massachusetts plans to archive millions of digital files in a format backed by IBM and Sun Microsystems, looking to ensure that data is readable even if Microsoft changes technical plans. Publishing the Office XML specs could help keep Microsoft out of regulatory hot water--and keep its products on purchasing lists.

"It's really about the level of documentation and the openness of that documentation," says Chris Darby, a general manager of XML products at Intel. "The fact that they're opening up gives the customer base some protection going forward."

Intel, Apple, and a handful of other companies say they'll support the Office 12 Ecma format. The ability for software from other companies to read and create files in ways compatible with Microsoft's software is becoming more important as customers connect business apps from vendors such as SAP and Oracle to Word and Excel. But independent software vendors have had to reverse-engineer Microsoft's apps to gain compatibility, and integration isn't always seamless. Office "is basically a black box," says Paul DeGroot, an analyst at consulting firm Directions on Microsoft. Going to XML was a big change, and "now they have to convince developers that it's safe." Customers don't want to face legal liability if they customize Office or incorporate the Office Open XML spec into their software.

Microsoft general manager Alan Yates confirms that Massachusetts and other customers are concerned about protecting themselves legally. Included in Microsoft's license agreement is "an irrevocable promise not to sue anyone for use of the format," he says. "The big thing we're trying to accomplish is widespread trust in the stability and longevity of this document format, well beyond the decisions of one company."

Office and related products brought in more than $11 billion in revenue and $2.9 billion in profits for Microsoft during the fiscal year ended June 30. But maintaining tight control over the data created with those apps is becoming a tough position for Microsoft to maintain.