Office 2000 may be Microsoft's fattest set of client applications to date, but it's also part of the company's first tentative steps toward a slimmed-down, server-based productivity suite. At the launch, Microsoft will highlight the suite's OSE (Office Server Extensions) feature, which improves collaboration between Office documents and Web pages. The extensions, which run on NT Server or Workstation, provide users with a way to store and access server-based files from an Office browser and facilitate activities like Web publishing, Web discussions, and subscription and notification. "Office 2000 took a really important first step there by making HTML a file format and offering the ability to access documents on a server. It will pay dividends in the future on the server and the handheld side," said Bob Muglia, director of Microsoft's business productivity group. As such, Office 2000 represents a marker on the path away from desktop-resident suites to those hosted on corporate servers or by ASPs (application service providers). Corel is heading down that path as well, with its forthcoming WordPerfect Office update. Exploring new delivery models After years of creating kitchen-sink "bloatware" suites, Microsoft and Corel are both exploring new software delivery models, including rentable applications, as a way for customers to reduce total cost of ownership. The strategy also poses less altruistic possibilities for both vendors: while the office suite market is currently valued at about $7bn, Forrester Research projects the ASP market will nearly match that with revenues of $6.4bn over the next two years. Corel hopes to get a jump on Microsoft in this emerging market with a program enabling customers to rent the WordPerfect Office 2000 suite and CorelDraw through an ASP. The company plans to launch the service provider program in the second half of the year. "Many customers, especially in small and medium businesses, see this as a better way to buy and deploy software," said Mark Emond, manager of global volume licensing programs at Corel, in Ottawa. Corel is talking to four or five top ASPs but has not yet forged a formal agreement, he said. Nor has it finalised its pricing model, although "even if we had the same pricing, that's only 50 per cent of the cost of software," Emond said. "[The rest] is the actual deployment and troubleshooting." Corel is also evaluating the Web model for its next version of WordPerfect Office, enabling components of the suite to work inside a Web browser, said Derek Burney, executive vice president of engineering. "At the end of the day, people will still have a need for a word processor and a spreadsheet... but they will be transformed to a more Web-based model." Microsoft's move to a 'rental' model for Office 2000 is less advanced. The company is involved in a number of closed pilot tests with ASPs to test the technical, contractual and pricing components involved in renting Windows NT and BackOffice, said Warren Talbot, the company's program manager for commercial and embedded licensing programs. Microsoft has not yet begun software rental/hosting trials for Office. The OSE feature debuting with the suite next week will lay the groundwork for that possibility by enabling NT Server or Workstation users to store and access server-based files from an Office browser, Talbot said.