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Office 2003 pricing the same as Office XP

Microsoft has announced that pricing for its Office 2003 application suite will be the same as Office XP when the suite is launched in the US at the end of October.

The software is now being manufactured and will be officially launched in the US and Canada on 21 October. Office 2003 products will appear on Microsoft's volume licensing price list on 1 September and shipping in pre-installed PCs will begin by the end of September.

New licences for Microsoft Office Professional Edition 2003 and Microsoft Office Standard Edition 2003 will have a price tag of $499 (£313) and $399, respectively - the same Microsoft now charges for Office XP Professional and Standard, but less than it charged when those products launched in mid-2001.

Upgrade licences 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 for the US is available 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 are 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 and tightening the connections between Office 2003 and server software such as Microsoft's SharePoint Portal Server and the forthcoming Office Live Communications Server (formerly Greenwich), Office 2003 becomes a front end for an array of business processes.

"In the past, Microsoft applications were really standalone, 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 of the client/server paradigm. It has taken an awfully long time to get there, but I do think developers and independent software suppliers will look at this as not just an upgrade, but as a dramatic shift in how Office can be productive."

The new front-end/bank-end integration offered by Office 2003 allows connections to be made among Office applications and with other corporate systems more easily. For example, companies would be able to shift data between Office applications such as Excel and Outlook and their own 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 said.

"The majority of the product's benefits come on the enterprise side," he said. "A fresh move to this would require quite an investment. But for those people who are running Microsoft, 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 but at a lower cost. The company has loosened the licensing terms for the edition to allow more consumers to qualify.

It has also added Office Small Business Edition 2003 to its retail line-up, which will carry a $449 price tag and adds several applications tailored for smaller organisations to the core Office product bundle.

Office 2003 has been through one of the most extensive beta testing programs in Microsoft's history, 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 meant to be finalised in June, but the slipped deadline is more Microsoft's standard practice than an indication of problems, Gardner said.

Stacy Cowley writes for IDG News Service


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