Microsoft: New Office Suite Will Meet January Shipping Deadline

While speculation still abounds over the actual delivery date of Microsoft’s Windows Vista operating system, the software giant is publicly vowing an on-time delivery of the next version of its Office productivity suite of applications.

Microsoft said it is on target to debut Office 2007 at the end of the year as planned. The product suite, which includes Microsoft Word, Excel and Powerpoint, will be optimized to run on the Vista operating system.

The final test version is ready, but the “better together” strategy that Microsoft is playing up with its next generations of Office, Windows Vista, Windows Server “Longhorn” is gated by the delay of the new operating system.

A String of Betas

Microsoft is getting closer to releasing the trio of new products. The company unveiled beta 2 versions of Windows Vista, Windows Server “Longhorn” and the 2007 Microsoft Office system at Windows Hardware Engineering Conference (WinHEC) on Tuesday. It is the first time that Microsoft has simultaneously released the test versions of all three of the company’s flagship products.

“The challenge for Microsoft in releasing test versions of Office and the operating system at the same time is that the teams haven’t worked together during beta. I don’t know of anyone who has run the two betas on top of each other,” Enderle Group Principal Analyst Rob Enderle told TechNewsWorld. “These products come out of different development groups that have historically have not cooperated well.”

Waiting on Vista

It’s not as much about how well the Office 2007 team cooperates with the Vista team at this point, though. It’s about how well the Vista team executes going forward. Vista’s delay could have a direct impact on Office 2007 sales as customers may wait to invest in the new suite until Vista is finally released.

Microsoft’s “better together” strategy promises customers who use all three products together four key benefits: simplification, better content protection and management, easier access to information and reduced IT costs and improved security. Since Office 2007 is optimized for Vista, customers may choose to hold out until the new operating system finally debuts to leverage those promises.

Alternatively, customers might not choose to upgrade to Vista at all until the bugs are worked out. A laundry list of features in the new operating system isn’t compelling droves of corporate customers to purchase upgrade rights, according to Directions on Microsoft Research Director Rob Helm. “The Windows client division has to tell corporate customers why they want Windows Vista, and why they shouldn’t wait until they buy new hardware,” he said in a research report.

Costly Delays

Still, there are plenty of consumers who are eagerly, if not patiently, awaiting the upgrade. Microsoft CEO Steve Ballmer delivered more bad news to those consumers at a Tuesday news conference in Tokyo: Vista could be delayed a few more weeks. “We are on track for shipping early in the year,” he noted.

It could be a costly few weeks, and has certainly been a costly few years. Microsoft intended to roll out Vista in 2004. Goldman Sachs analyst Rick Sherlund estimated that each month the product is not released costs Microsoft between US$150 million and $200 million in lost revenue.

“Comments from management indicate that it is a tight schedule and leads us to question if January may be optimistic,” Sherlund said in a May 15th research report.

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