Microsoft gives partners first glimpse at Office 12

MINNEAPOLIS – Microsoft for the first time publicly showed the future version of Office at its worldwide partner conference.

The company also updated the more than 6,000 solution providers attending the event on upcoming releases

of CRM, Visual Studio, SQL Server and BizTalk Server.

Office 12 is scheduled for release in the fall of next year. However, the first beta version will be released to IT managers on Nov. 1. “They will be able to understand all the features in Office and get up and running faster, said Chris Capossela, corporate vice-president of information worker product management at Microsoft.

Currently, Office System 2003 has earned 130 per cent annual growth for Microsoft partners. Office 12 is expected to double that between 2006 and 2007, Capossela said.

“Many people do not think about office besides the basic fundamentals. We want to connect business processes and people with the next release,” he said. “A lot of people don’t understand how Office has changed. It has gone beyond the apps like Word, Excel and PowerPoint and become more of a content creation, and analysis tool. It can also organize information and help you stay connected.”

Processing forms will be one of the new features in the new Office through the InfoPath application, according to Capossela. When Office 12 is finally released sometime in the fall of 2006, there will be 26 different programs built into the suite. This is a far cry from what Office started out as with Word, Excel, PowerPoint, and Access. Since that time, Office as attracted more than a million developers who build solutions on top of the suite.

Competition for Office will not come from Corel WordPerfect suite, Capossela said. It is actually older versions or pirated versions of the productivity suite. “That isn’t good enough,” Caposellas said of old and cloned versions. ” The workplace is changing and the old tools are not good enough to bring people and business processes together.

Microsoft will be providing free solution services for technical and sales and marketing training in an attempt to help the partner close the first deal. The company will be allotting more than US$300 million for this effort.

“We are making a big bet into the partner program to push partners to messaging and collaboration, portals and ECM,” Caposellas said.

He added that his is largely an untapped market for Office. Caposellas said it is worth US$140 billion by 2008.

Microsoft will also require more solution providers to resell and develop solutions around Office to meet this market need. Caposellas estimated that the company will need to recruit four times more Office partners than they have today. Office 12 will also have increased margin opportunities between 20 to 40 per cent, Capossela said.

New Office partners, he said, will be able to cut their first deal in four months, take nine months to break even and potentially net five times the investment return in two years.

Microsoft senior vice-president Doug Burgum said that Microsoft usually gets software right on the third release. Coincidentally, CRM 3.0 will be released in the fourth quarter of this year.

Microsoft designed this new version to work the way individual users do. It will also be built on service-oriented architecture on Web services and XML. According to Burgum, the next version of Microsoft CRM will be tailored more towards 40 million customers around the world who are not part of the global 2,000.

Joel Martin, a market analyst at IDC Canada, said the projection for CRM segment in Canada is expected to be more than $250 million by 2009. The CRM market in 2004 was just under $200 million.

Conversely, the mature ERP market in Canada is forecasted to be about $650 million by 2009, while last year the ERP market was worth $540 million.

“In terms of spending by industry, small enterprise (50 employees or less) is four per cent of the market in 2004 and growing to seven per cent by 2009,” Martin said.

Meanwhile, Martin added that the medium enterprise space (51 employees to 499) was 20 per cent last year growing to 25 per cent by 2009.

Burgum said the margins for the new CRM package will be around 45 per cent.

Microsoft CRM is part of the Microsoft Business Solutions product line and Burgum told the conference today to expect a converge solution encompassing Great Plains, Solomon, Axapta and Navision sometime in 2008.

Microsoft also announced that Visual Studio 2005, SQL Server 2005 and BizTalk Server 2006 will be launched Nov. 7.

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