Company officials said the move to replace Microsoft's traditional binary file formats with XML-based versions as the default in Office 12 will let people more easily share information.
Microsoft pledged that the shift to XML, or Extensible Markup Language, will decrease the size of many individual files and make documents created in its Office products more resistant to corruption.
While Microsoft's Excel and Word programs already offer some XML compatibility, the new formats will bring those applications, and PowerPoint, into a "full fidelity" version of the standard, said Takeshi Numoto, senior director for the Microsoft Office System. The biggest advantage of the new formats, Numoto said, will be their capacity to allow workers to access data from various documents without opening individual files, and to allow workers to use that information in new ways.
"You can dream of many scenarios to integrate documents with multiple back-end data sources and line-of-business sources," Numoto said. "You could have Excel connected to sales data on a back-end system. This is a situation where the line between content and data becomes blurred."
The company said the new files will be compatible with its existing documents, and promised that it will distribute a free downloadable "converter" that allows users of Office 2000 and later versions of its so-called productivity software to work with the new formats. Customers will have the option to not use the new files in Office 12, but the XML formats will be set as defaults in the three applications when the package ships, sometime in the second half of 2006.
In addition, when a person using one of the new Office formats opens and edits a document created in the old system, the file will be saved in the format in which it was originally created in an effort to simplify compatibility. The file extension names for the new formats will add a letter "x" to Microsoft's existing naming conventions, such that a document created in Word will have the suffix ".docx" added to its title.
The announcement marks the latest effort by Microsoft to adopt XML throughout its business software lines, an initiative that has been maturing since the company first said it would license the XML-based file formats used in its Office 2003 release. More recently, the firm announced that it had committed in perpetuity to offering a royalty-free license of Office-related XML document formats.
Microsoft has also pledged to provide appropriate documentation for and encourage the creation of "filters" by other software makers that would allow other applications to read Microsoft's existing word-processor XML format. Rival Sun Microsystems said last year that it would create document filters for its OpenOffice open-source desktop suite.
"Open file format continues our policy of providing our XML schemas in an open, royalty-free license," said Microsoft's Numoto. "That's an important element of facilitating partners and developers to use that schema to integrate the format into their solutions."
Numoto said that by allowing documents to be saved in a manner that resembles an open container with different portions of files accessible to the outside, the new XML formats data not only will be more easily accessible, some file sizes will be reduced by as much as 75 percent. In an attempt to improve their security, the formats will also prevent executable code--specifically viruses or other threats--from being delivered in files where it does not belong.
Industry watchers said that there should be some significant benefits for Microsoft customers with the new file formats, primarily when it comes to culling data from different Office applications. Jim Murphy, analyst with AMR Research, said that the software giant is essentially "bringing XML to the masses" by incorporating it so heavily in the next version of Office.
"The file formats should make it considerably easier to build integration between Office and other applications, in particular enterprise software systems," Murphy said. "The XML factor is capability that people have wanted in terms of adding accessibility and customization options."
Murphy said that there will likely be some trepidation on the part of customers concerned that compatibility issues will surface with the introduction of the new formats. And he said that it may be unrealistic to expect the decreased file sizes being promised by Microsoft, but he believes that people will respond positively to the expanded XML strategy in general.
IDC analyst Sue Feldman said that the Microsoft announcement echoes a larger movement toward the adoption of XML and other standards across the IT industry.
"If you look at greater context beyond Microsoft, the move towards using standards, especially XML, as part of services-oriented architecture is gaining so much ground that you're already seeing a separation of content and presentation," said Feldman. "That's significant because it allows you to do things with the presentation of information without changing the underlying content."
Feldman agreed that some customers will likely shy away from investing in Office 12 until it has been proven that companies can begin using the file formats with older documents without incurring major headaches. However, she praised Microsoft's effort to understand where it can provide substantive gains for knowledge workers while also taking into account the ways they use its existing technologies.
"For Microsoft to do this shows that they are very aware of how people work, and how they need to work, and where the stumbling blocks are today," she said. "They're gradually translating that knowledge into a series of improvements to their products, so this is significant for them and will be a real change for those who adopt it."
