New ensemble package from Microsoft is greater than the sum of its parts


It's a powerful new tool for creating business documents.

It's a diabolical scheme for domination of the desktops of corporate America.

It's a great bargain.

It's a potentially lethal threat to smaller software companies.

Microsoft Office version 4.0 -- an all-in-one package comprising the Windows versions of Word, Excel, Powerpoint and Mail -- is greater than the sum of its parts.

The latest version of Microsoft Office, introduced last week, has the potential to change the way business users of personal computers buy and use software.

Microsoft Corp. has done more than simply bundle its main business productivity applications and sell them at a discount, although the price of Office will certainly be an inducement for many corporate software buyers.

Until Feb. 1, anyone who already owns one of Microsoft's flagship programs -- Word, Excel, Powerpoint or Access -- can buy the standard Office "suite" for $259. People who own a competitor's program can buy Office for $299. The price goes to $750 after Feb. 1.

The Access database is not included in the standard edition

of Office, but it can be added for an extra $99. Access is included in the "professional" version of Office that Microsoft will sell for $899 after Feb. 1.

The introductory price is remarkable considering that Word, Excel, Powerpoint and Access each has a suggested retail price of $495.

No one pays list price, of course, especially corporate customers who negotiate special deals for volume purchases.

Similarly, the Lotus Development Corp. is offering its Smart Suite, a collection that consists of the 1-2-3 spreadsheet, the Ami Pro word processor, Freelance Graphics, the Approach data base and Lotus Organizer, a personal information

manager, for $299 to anyone switching from any single competing product. Smart Suite normally sells for $795.

"Philippe Kahn's $49 pricing for Quattro Pro looked outrageous at the time, but look at these prices," said Richard A. Shaffer, publisher of the Technologic Computer Letter, referring to Borland International Inc.'s stunning price cut on its spreadsheet earlier this year.

Kahn, Borland's chief executive, said at the time that such price-cutting was necessary because his main rivals, Microsoft and Lotus, were in effect hiding price cuts in the cost of their software suites, as such software conglomerations are known. It is clear now that he was right.

It's easy to focus on Office's price, but the real key to Office is that Microsoft has made the various components interact with one another in new and more streamlined ways, making it much easier for users to create documents that combine words, numbers, lists and charts. In effect, Office is a single monster application that blurs the boundaries of traditional stand-alone applications.

Many PC users do their jobs within one or two applications, like a word processing program or a spreadsheet. For such users, much of the power of Office is unnecessary.

However, an increasing number of executives are creating documents that combine several different types of information. Instead of writing a report, switching applications and creating a separate spreadsheet or chart, the Office user can move almost seamlessly within a single document from one tool to another.

The question for some buyers is likely to be, is it wise to put all of one's bytes in one basket by buying all of one's software from a single company? Realistically, though, there is nothing to prevent customers from using one or more parts of Office with their existing preferred programs, such as Wordperfect or Freelance Plus.

(Peter Lewis works out of the New York Times' Austin, Texas, bureau: [512] 328-8258.)

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