Suite Dreams For Microsoft Software Giant Set To Release New Version Of Cash Cow

Spreadsheets and spellcheckers may never draw the hype and glitter of Windows and the World Wide Web, but they do attract the money.

On Thursday, Microsoft launches Office 97, the latest version of its best-selling suite of business applications that’s been extensively revamped to work with the Internet.

Microsoft Chairman Bill Gates will speak to about 1,000 reporters and industry officials at New York’s Lincoln Center to mark the start of retail sales for Office 97, a blend of Microsoft’s word processing, spreadsheet, database, graphics presentation and desktop organization software.

That’s staid compared to the worldwide circus-themed extravaganza with the Rolling Stones and Jay Leno to launch Windows 95, or the incessant drumbeat of how the Internet is going to change humankind.

But Office is no less a core product for the world’s largest producer of software. It holds an 80 percent or better share of its market, and an estimated 55 million computers use one or more of its component programs. IBM-Lotus Development’s SmartSuite and Corel’s WordPerfect Suite and Office Professional account for nearly all the rest.

Office will provide the bulk of this year’s estimated $5 billion in annual sales for Microsoft’s applications division, which in turn is about half of the company’s revenue, says Dennis Tevlin, the division’s director of product marketing.

About 500,000 copies have been ordered by retailers, Tevlin said, and about 3 million have been ordered for corporate licensing.

Those numbers aside, Office 97 won’t be an overnight sensation, industry analysts say. Its prime market, large corporations looking to standardize business software, don’t make such decisions overnight.

“It takes a long time for businesses to upgrade,” says Dan Lavin, an analyst at Dataquest in San Jose.

“While Microsoft has a real winner on its hands technologically, we think of it more as a solid base hit from a business standpoint,” Lavin said.

As an example, Boeing Co. already makes widespread use of earlier versions of Office or its component programs on its 65,000 desktop and workstation computers, says Joe Lussier, Boeing’s manager of software architecture and standards.

But Lussier says Boeing will make an extensive technical analysis of Office 97 and then a separate business-case review before it decides whether and where it makes economic sense to upgrade.

Microsoft may say its new software is wonderful, but “until we do an assessment, those are marketing claims,” Lussier said.

Office 97 again bundles the Excel spreadsheet, Word word processor, Access database and PowerPoint graphics presentation programs, as in previous Office versions. But Microsoft says it has worked hard to have elements of those programs work together seamlessly, along with a newcomer, Microsoft Outlook.

Outlook is an information manager that organizes electronic mail, contacts, appointments, to-do lists and other workaday tasks. Increasingly, Tevlin says, it will be where users start work as projects become more collaborative and companies embrace e-mail, the Internet and in-house “intranets” to get jobs done.

Office 97 has been extensively reworked to use the Internet, with tools for the World Wide Web embedded throughout. Also new is Office Assistant, which uses animated characters - including a midget Einstein - to provide help on Office’s thousands of functions.

Ease of use has been a big concern, Tevlin said. The program is so big (191 megabytes in its largest version) and broad (Que Corp.’s book on how to master it runs 780 pages) that discovering a function can be an adventure. In fact, one-quarter of customer calls to a Microsoft “wish line” recommending new Office features suggested functions that were already in the software.

That huge capability has been scorned as “bloatware,” with skeptics wondering who would ever have time to use all those functions and still operate a business. But that’s what customers want, Tevlin said, especially in an age of downsizing and rapid change of job descriptions.

“The challenge for us is to deliver all that without complexity,” Tevlin said.