While the world debates the merits of the upcoming Microsoft Office revamp versus the free OpenOffice, Microsoft is trying to make the argument irrelevant by moving its users towards an integrated server-based collaboration platform. In this scenario old workhorses like Word and Excel become rich clients for SharePoint 2007, the latest release of Microsoft’s enterprise portal product. Hence Microsoft’s new product is called 2007 Office System, rather than merely Office. It is a potent strategy, though adopters risk vendor lock-in along with an expensive upgrade cycle if they use it to the full.

The centrepiece of the Office System is SharePoint, a set of services built on top of ASP.Net, the Windows web application server. SharePoint has many faces. It is a portal server, which lets users assemble intranet sites by snapping together “web parts”, bringing together diverse streams of enterprise data and allowing extensive user customisation as well as “Web 2.0” features such as blogs and wikis. SharePoint is also a replacement for the traditional file share, adding key features such as document history, commenting and discussion, alerting, fine-grained permissions and advanced search.

At Tech-Ed in Barcelona this month, Microsoft showed how SharePoint 2007 can combine with the new .Net Workflow Foundation library to create enterprise portals, managing and monitoring the changing status of processes such as document approval or expense reports. Users can also embed XML forms created with InfoPath, the Office forms application, making SharePoint a server for form-driven applications.

SharePoint 2007 also introduces a server-side version of Excel. There are three parts to Excel Services. The Excel Calculation Service manages the data a nd calculations. Excel Web Access renders spreadsheets as HTML for browsing and interacting with spreadsheets via the web, while Excel Web Services offers programmatic access to the server-side spreadsheet engine. Companies that have attempted to use the desktop version of Excel behind web sites will welcome this new product. The Excel Services do not support Excel macros or Visual Basic for Applications, instead allowing programmers to create user-defined functions using .Net.

Completing the Office System picture is VSTO (Visual Studio Tools for Office), an add-in for Visual Studio that lets developers write custom code behind Office documents, following a similar model to that used in ASP.Net for dynamic web pages. VSTO is intended to replace Visual Basic for Applications (VBA), though being based on .Net with its substantial runtime requirements it is a more heavyweight solution, and this can cause problems on older machines. VSTO solutions are also more closely tied to specific editions of Office than VBA macros, which is difficult for organisations with a mixture of Office versions.

The server-side potential of the new Office System is compelling, though it comes at a price. The licensing is complex, with core SharePoint services coming for free with Windows Server 2003, and different levels of licence for the more advanced features including both server and client access components. A major obstacle to adoption is that ideally companies need to upgrade Office throughout. “You don’t have to be running the 2007 clients to be connecting to the 2007 servers,” says Office senior product manager Chris Bryant, “but the clients and servers in Office 2007 system definitely work best together.”

The other question mark over Office System is whether Microsoft has the right internet strategy. The company has a vested interest in keeping customers hooked on its rich clients as well as Windows, and Office System reflects that. Although SharePoint offers rich web collaboration, this does not include document authoring, which remains an offline activity. In contrast, a new breed of web-based office suites from Google and others makes minimal demands on the local PC, letting users log on and work from anywhere, whereas Microsoft is still betting on the superior functionality in its desktop applications.