Microsoft will deliver the Office 15 beta suite at the end of March, and sources within the company say it will include radical changes to how the product is delivered, bought and licensed.
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Trends, including the consumerization of IT, bring your own device (BYOD) programs and Gartner Inc.'s recent prediction that the personal cloud will replace the personal computer by 2014, have all put pressure on Microsoft to deliver versions of Office and Windows that IT pros and end users will embrace.
Though Microsoft hasn't officially discussed any of its planned features or licensing for Office 15, sources privy to information about the next-generation suite provided some details -- including the availability of a much-awaited Office App for iPad and licensing changes.
Office 15 features and licensing
Some of those licensing changes will give business users more flexibility in how they order Microsoft Office and will allow them to have different versions of Office delivered to the same account.
For example, as part of the same license, users can have a mix of the new Office 365 cloud-based services version along with other versions of Office that can be used on multiple devices, including desktop, laptops, iPads and iPhones.
The cloud services-based edition will be marketed under the Office 365 brand name with different versions aimed at small and medium-size businesses and consumers.
The new versions will all take much greater advantage of Windows Live SkyDrive and other cloud storage technologies, according to sources familiar with the company's plans.
"SkyDrive and cloud storage integration will be set up to make communicating and collaborating between the ground and the cloud seamless. It is going to be a big part of the new offering," said a source close to Microsoft who requested anonymity.
The intention is to make it easier for users to switch between a local copy of Office at work or home with using Office 365 in the cloud. Instead of having to email documents as attachments, they will all be available through SkyDrive -- mimicking the approach of Google Docs.
Microsoft Office 15 is currently in a technical preview for OEMs and select third-party vendors. Office 15 will also include Metro-style versions of Word, Excel, Outlook, PowerPoint and OneNote, with an emphasis on the software's readability, according to one published report. Another report indicated that Office 15 will have a minimalist interface but retain the features that users have come to expect from Microsoft, such as Track Changes.
Furthermore, the source said, much of the core code for the various versions of Microsoft Office 15 is "very stable," and the company expects to deliver the finished product in the fourth quarter. Unfortunately, the beta version, which sources say could have been delivered a couple of months ago, has been held back by various technical problems with Windows 8. If those technical problems cause Windows 8 to slide to an end-of-year delivery, Microsoft will also hold off on delivering Office 15 until the new operating system is ready, sources said.
The future of Office
Nearly 200 million licenses of Office 2010 have been sold in the 18 months since launch, according to Microsoft. Last quarter, the division responsible for Office accounted for 30% of Microsoft's entire revenue.
Despite not delivering an Office app for the iPad yet, Microsoft's software suite has not yet lost any significant market share in the mobile space because the threat of competitive offerings has failed to materialize. Still, some say the longer Office goes missing from Apple's App Store and the faster people come to accept Google Docs as a substitute, the quicker Office will be perceived as irrelevant. On the other hand, making Office available on the iPad could be problematic.
"Having some competent version of Office available on an iPad would remove one of the biggest barriers to [the iPad] being used more widely among business users," said Ed Sanders, IT manager at a large financial services company in Chicago. "If you have apps like Word and Office being able to collaborate more easily with existing versions [of Office], I think some managers would be more likely to replace their aging laptops with iPads."
As of last week, Microsoft officials had not decided on which versions of Office 15 they would send to beta first. "There are a lot of internal debates ongoing right now," sources said.
Industry analysts say Microsoft has a tough task ahead of it when it comes to selling and licensing Office 15. "Given the bedlam of Office for iPad, Office on [Windows On ARM], and Office 365 mixed into it, there are so many variables," said Wes Miller, a research analyst at Directions on Microsoft, an independent analysis firm in Kirkland, Wash. "It's all up in the air," he said, until the company announces something.
Microsoft will release touch-enabled versions of Office 15 for mobile devices, primarily for Windows 8 ARM tablets, as well as versions for Apple's iPad and iPhone, sources said. It's unclear at this time how the feature sets will break down among the various versions or what they will cost.
Such versions are long overdue in the estimation of some observers, and their absence has held back the Office franchise from taking advantage of the white-hot mobile market. The lack of Microsoft Office applications is also the one glaring weakness of Apple's mobile devices, in the estimation of many enterprise IT experts.
Currently, consumers can pick up Office for PCs for around $125. Per-seat pricing for the enterprise is estimated to be around $50 after factoring in business discounts. However, pricing on the iPad is a totally different situation. Office competitors in Apple's App Store are all priced under $20.
Office 365 lets Microsoft increase the overall per-user enterprise pricing of Office by moving toward a Software as a Service model, industry watchers say.