XP meets a mixed user reaction

The arrival of Office XP could mark the end of the packaged software era as Microsoft moves towards selling services online, and product upgrades will become incorporated into its web-based .Net strategy, said marketing director Oliver Roll.

"XP is the first example of how software will become a web service rather than a personal productivity tool," explained Roll at the official launch of the latest Office version.

"We're moving towards a world where software used to be something you bought on a CD every 18 months, but it will become something that changes every day, is upgraded and learns about you, and what you want," he added.

The new approach will radically change the way Microsoft sells its products. "Rather than a box with a CD, we'll be selling a service over the internet. The second thing that will change is the way people buy software. Now you might pay Microsoft £150 every three years. In the future, some will still do that but some will pay us £10 a month," said Roll.

Microsoft has been heavily promoting Office XP, and its success is crucial. Office sales currently represent about 40 per cent of its revenue, and the company claims that the software will cost less to own, and will save users one hour a day in increased productivity because of added features such as smart tags and crash recovery.

This aggressive push has had some success. The Halifax plans to roll out XP across its 37,000 desktops to consolidate its current mix of Office 95, 97 and 2000.

Car manufacturer Ford is also believed to be using XP to improve its supply chain efficiency and increase productivity.

But many users remain unconvinced. In a recent survey of Computing readers, 80 per cent said they had no plans to upgrade to the new version for at least a year, and analysts warn that the new sales model will prove expensive for users.

Microsoft remains undaunted by such findings, however, and expects about 30 per cent of current Office users to upgrade to XP within the next 12 months.