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Microsoft Corp has announced that the next version of its Office suite, codenamed Office 11, has entered the first beta testing stage. The release of the new version comes as Microsoft arguably faces more competition in the office productivity software market than at any time in its history.

Redmond, Washington-based Microsoft dominates the desktop office application space, with Office taking about 90% of the market, but is coming under increasing pressure from proprietary software vendors such as Corel Corp and Sun Microsystems Inc, as well as open source projects such as OpenOffice.org.

Some of the new key features in Office 11 could actually make it easier for those competitors to compete with Microsoft, as the company moves to support more open file formats with the adoption of XML. One factor that has limited the functionality of competitors such as Sun's StarOffice has been their ability to handle Microsoft's proprietary file formats. As Microsoft becomes more open, it could actually be opening the doors to the competition.

Microsoft's response to this potential outcome is to use the file formats to increase integration and collaboration with other Microsoft applications and services. Office 11 will feature tighter integration with Microsoft's SharePoint Team Services web site software, enabling users to more easily collaborate and communicate with team members. Office 11 will also feature new functionality called Smart Documents, which connects documents to other relevant content and applications.

The company is also developing a new application that may become part of the office suite, codenamed XDocs, which will incorporate word processing and graphics capabilities, and is designed as a single input point for data that can be shared by multiple existing applications. XDocs is due for release alongside Office 11, although Microsoft is yet to decide if it will be part of the suite, or a standalone product.

Microsoft is keeping further details of Office 11's functionality close to its chest at this stage. The first stage of the beta testing process involves only 6,000 internal and 6,000 external testers, with only select testers having access to the first beta version. There will be a second more open beta testing version before Office 11 becomes generally available in mid-2003.

© ComputerWire

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