Microsoft Corp.'s decision to allow its Office software to handle the increasingly popular OpenDocument Format (ODF) was a belated acknowledgment that the company could lose customers if it didn't, analysts said Thursday.

The software giant announced it would help three companies develop add-ins for its Office software suite that will create drop-down menus in Word, Excel and PowerPoint to open and save items in ODF.

The code for the add-ins will be released under the Berkeley Software Distribution (BSD) license on Sourceforge.net, an open-source development Web site.

Microsoft won't say how much it is investing in the project. The three companies developing and testing the translators are Clever Age of France, Aztec Software & Technology Services Ltd. of India and Dialogika in Germany.

"Microsoft has been kind of forced to do that, kicking and screaming all the way, but it really didn't have any choice," said Laurent Lachal, senior analyst in charge of open-source research for Ovum Ltd. "The move was bound to happen."

ODF is used in OpenOffice.org, a free, open-source application, as well as StarOffice, the commercial version of OpenOffice.
While adoption of OpenOffice remains relatively low, governments are showing increased interest in ODF. Both Belgium and Denmark have scheduled trials using ODF, and the state of Massachusetts intends to use ODF by Jan. 1.

Microsoft acknowledged that requests from the government sector played a part in its decision.

The issue over file formats had "clouded" the decision-making of people determining how they would get the most value from their software, said Tom Robertson, Microsoft's general manager of standards and interoperability.

Microsoft has elected to post the source code for the translators on Sourceforge.net. A first version of an OpenDocument (ODF) translator for Word 2007 was posted there Wednesday.

The decision brings a public relations benefit for Microsoft, which has sought to reverse bruises incurred five years ago when Chief Executive Officer Steve Ballmer labeled the open-source Linux OS "a cancer."

"That doesn't necessarily mean that they are now backing open source or taking it as a strategy of their own to go into that direction with their products," said Diego Lo Giudice, principal consultant for Forrester Research Inc. "They are under pressure. From the marketing perspective, it creates a little bit more positive feeling about Microsoft."

Overall, Microsoft and open-source software will benefit, but not necessarily at the expense of the other, Lo Giudice said.

But Microsoft took pains to stress the superiority of Open XML (Extensible Markup Language), its own specification under consideration to become a document standard, over ODF. Open XML will be the default file format for its upcoming Office 2007 release.

Jean Paoli, Microsoft's general manager of interoperability and XML architecture, said in an interview that Open XML is backed by 4,000 pages of documentation of features, while ODF has around 700 pages.

"We really believe that Open XML is the full-featured format," Paoli said.

But Lachal disputed the comparison, saying ODF is a developed technology. The two formats can't be compared by the length of their documentation.

"That's nonsense," he said.

Older versions of Office will get translators as well as upgrades to Open XML, Microsoft said. By December, a final version of the Word translator will be released, with ones for Excel and PowerPoint available in 2007.

IDG News Service

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