For example, Infopath is a new tool for creating simple electronic forms. Data typed into such forms is stored as XML. Another addition is Onenote, a program that allows users to jot down notes in a similar way to Stickies on the Apple Mac.
But the big change relates to software development. Office is being positioned by Microsoft as a platform for workflow and collaborative computing.
Ivo Salmre, product manager for Visual Studio at Microsoft, said, "Sophisticated organisations will develop applications based on smart documents in Office."
Users can customise Office 2000 and Office XP using Visual Basic for Applications (VBA), a scripting engine built into Office. Microsoft has now extended the development features in Office, providing support for its .net web services architecture. Compared to the limited functionality in VBA, .net gives an Office programmer a far richer development environment.
Salmre said, "Developers can use Visual Studio and Microsoft Office to build and deploy complete business applications." He said the addition of the .net technology would allow IT departments to roll out rich client applications developed on the Office system.
One company looking at how software could be developed around Office is Digita, which has developed electronic forms for filling in Inland Revenue tax forms. The software uses an Office-based form running on an end-user's PC that validates the tax form. The completed form is submitted via Digita's website to the government gateway.
James Governor, principal analyst at Redmonk, said the main focus of the new Office product is providing a way to reduce the amount of paper-based processes still used by businesses. He said, "For all the talk of e-business, it is amazing how much paper business still exists. Microsoft wants to provide a mechanism for automating business processes."
Governor said the new version of Office, although extremely powerful, would require IT to take central control of Office to avoid situations where the IT department is unaware of how Office has been customised within business departments. "You could end up with a situation where business-critical software based on Office is run and managed by business departments rather than IT," he said.
IT directors faced such a problem in 1999, as they battled to track down all the non-Y2K-compliant code in their businesses. At the time, it was common to run business-critical functions on spreadsheets, some of which were not Y2K-compliant.
Governor warned that the flexibility in Office would put incredible strain on IT departments that have to manage a stable IT environment. "IT departments will need to take control of which features in Office to roll out," he said.
He suggested that IT departments should consider thin client technology such as Terminal Services within Windows 2000/2003 or Citrix Metaframe, both of which could be used to centralise the configuration of Office.