Office 2003 pricing remains same as Office XP

When Microsoft Office 2003 is formally launched at the end of October, its cost will be unchanged from the current retail pricing of Office XP, Microsoft Corp. said as it announced its completion of the applications suite.

The software has been released to manufacturing, and will be officially launched in the U.S. and Canada on Oct. 21. Office 2003 products will appear on Microsoft's volume licensing price list Sept. 1 and begin shipping preinstalled on some PCs by the end of September, according to Microsoft.

New licenses for Microsoft Office Professional Edition 2003 and Microsoft Office Standard Edition 2003 will have a retail price tag of US$499 and $399, respectively -- the same as Microsoft now charges for Office XP Professional and Standard, but less than it charged when those products launched in mid-2001.

Upgrade licenses will cost $329 for Office Professional 2003 and $239 for Office Standard 2003, the same prices now charged for Office XP upgrades. A full Office 2003 price list is online at http://www.microsoft.com/office/preview/pricing/.

Office 2003 is Microsoft's most significant Office revamp in at least five years, according to one analyst.

"The last several releases were really point releases. With this release, I think you're getting an awful lot more. I think the value has finally caught up to the price," said Dana Gardner, a senior analyst with The Yankee Group in Boston.

Office 2003 fundamentally alters the relationship between Microsoft's applications and the back-end systems with which they interact, he said. By exploiting the advantages of XML (Extensible Markup Language) and tightening the connections between Office 2003 and server software such as Microsoft's SharePoint Portal Server and forthcoming Office Live Communications Server, formerly known by the code name "Greenwich," Office 2003 becomes a front-end for an array of business processes, Gardner said.

"In the past, Microsoft applications were really sort of stand-alone, isolated products. The files that were created were often scattered about and hard to manage," he said. "(Office 2003) combines the best of what Web services and XML have to offer with the strength that the client/server paradigm has to offer. It's taken an awfully long time to get there, but I do think developers and ISVs (independent software vendors) will look at this as not just an upgrade but really as a dramatic shift in how Office can be productive."

The new front-end/bank-end integration offered by Office 2003 more easily allows connections among Office applications and between those applications and other corporate systems. Companies would, for example, be able to more easily shift data from Office applications such as Excel and Outlook and their own CRM (customer relationship management) system. Documents once disconnected and "off in the ether" can now be linked together, Gardner said.

Such functionality carries obvious benefits for business users at large enterprises, but Office 2003 offers fewer advantages for home and small office users, Gardner noted.

"The majority of the product's benefits come on the enterprise side," he said. "To move to this entirely fresh and new would require quite an investment. But for those people who are running Microsoft shops, this will be a lot less of a capital-intensive migration."

Microsoft expects most home users to opt for the $149 Student and Teacher Edition 2003, which includes all the applications in Office Standard 2003 at a lower cost. The company has loosened the licensing terms for the edition to allow more consumers to qualify. It has also added to its retail lineup Office Small Business Edition 2003, which will carry a $449 price tag, which adds to the core Office product bundle several applications tailored for smaller organizations.

Office 2003 has been through one of the most extensive beta testing programs in Microsoft's history, the company said, involving 600,000 testers offering feedback throughout the past year. The suite's official launch in October will be in New York.

The suite was originally slated to be finalized in June, but the slipped deadline is more Microsoft's standard practice than an indication of problems, Gardner said.

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