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When Microsoft says that the next version of Office is the most important revision in over a decade, it's not kidding. Both new XML-based default file formats and a major interface revamp are intended to make the market-dominating productivity suite more flexible and accessible than ever. Veteran users may find the changes in the new version, code-named Office 12, unsettling, but they seemed well worth the adjustment in my tests of the first beta release. The final edition is slated to ship sometime in 2006.

A New Look

Even before the technical beta's limited release, Microsoft had previewed Office's startling new interface, which all but does away with drop-down menus and toolbars in most of the suite's applications. Instead, users get a set of tabs atop what the company calls the "ribbon"--an inch-high toolbar that displays various functions relevant to the selected tab. Click on the Write tab in Word, for example, and the ribbon presents you with font and formatting options as well as the familiar cut, paste, and find/replace functions that used to live in the Edit menu.

New File Formats

But lurking behind the scenes is a change that may ultimately prove even more significant than the interface makeover: Microsoft's replacement of its current proprietary default file formats with new compressed XML-based file formats, denoted by the addition of the letter x to traditional file name extensions (.docx instead of.doc,.xlsx instead of.xls, and so on).

These new Office Open XML formats improve on their predecessors in several ways. For starters, they are more compact: When I saved an unchanged Word 2003 file as a.docx file, it was less than half its previous size. And since Office XML formats are based on both XML and Zip formats, they should be more universally accessible to other applications--even those in other operating systems--as developers begin incorporating Microsoft's XML schemas (which provide the programming details for interpreting XML documents) into their software. The company has already published draft versions of these schemas, and it has also proposed Office XML to the Ecma International standards organization as a royalty-free, open standard.

Office 12 still lets you read and write to Office 2000-2003 default formats--and, for the first time, it permits you to save files as read-only PDFs. Conversely, Microsoft says it will offer free downloadable extensions allowing users of Office 2000-2003 to create, open, edit, and save Office XML files. When users of the legacy versions try to open an Office XML file, they will be directed to the download site.

Zipped Components

Because each Office XML file is actually a zipped collection of component files (text lives in one component, style attributes exist in another, reviewer comments are in a third, and so on), you can easily alter these attributes by changing the Office XML extension to.zip, opening the file using any unzipping utility, and removing or substituting component files. For example, you could quickly swap in a new style subfile (created by programmers, or simply copied over from another Office XML document) without making changes to the text.

Initial Confusion

Chief among the additions is the live preview capability. As you hover the mouse over a format--for example, a new font or paragraph style--in the ribbon, the change shows in your document before you commit to it. This time-saving feature is available across the suite for a variety of options.

One downside: The ribbon does cut into your screen real estate, and the ribbon's size is not adjustable--the larger your monitor screen, the better.

Another significant interface change in Word: The Status toolbar at the bottom of the window, which shows the number of pages and the current page of a document, now also displays a running word count and a sliding zoom bar for adjusting your view from the default 100 percent.

An equally welcome addition to Word, Excel, and PowerPoint is the Document Inspector (under File, Finish), which searches for hidden text that you might not want others to see--comments, the document owner's name, and the like--and offers to remove any or all such material.

The improvements in Excel 12 include enhanced help for beginning users, beefed-up capacity (worksheets can now handle up to 1 million rows and 16,000 columns), and easy-to-apply cell designs.

An Excellent Excel

Excel's conditional formatting function lets you liven up your spreadsheet with colors and effects based on the contents of the cells.Excel's conditional formatting function lets you jazz up your spreadsheet with colors and effects based on the cells' contents. For example, you can create thermometer-like color gradients depending on the numerical values contained in a group of cells.

I particularly liked Excel 12's formula-writing help: In past versions, you had to type in the exact name of a formula. Now, as you start typing, a pop-up menu shows all formulas that begin with the letters you've typed, and each formula has its own tool-tip definition. As you continue typing, Excel narrows your options accordingly.

Petite PowerPoint

Quick-change artist: Applying new styles to presentations takes only a couple of clicks using PowerPoint 12's Design ribbon.Office XML's file-shrinking magic is particularly striking in PowerPoint 12. A single slide containing a photo and graphics that took up a hefty 5MB in PowerPoint 2003's default file format shrank to a modest 610KB (about 0.6MB) in the new.pptx format.

PowerPoint 12's use of the ribbon provides a sense of control lacking in earlier versions. For example, by clicking on Effects in the Design ribbon, you can turn a rudimentary bulleted list into a logical diagram--and then quickly spruce up that diagram with a 3D or glow effect using other options on the same ribbon. In previous versions of PowerPoint, these options were buried in a labyrinth of multiple menus.

Outlook Update

Looking ahead: The new To-Do Bar on the right of the Outlook 12 window shows all pending tasks and upcoming appointments.Office 12's interface consistency breaks down in Outlook, however. No ribbons here--just the same old drop-down menus. What is different is the new and potentially useful To-Do Bar. Similar to the task pane found in Word or Excel 2003, it appears on screen right and is supposed to display all pending tasks and upcoming meetings.

Microsoft says that when used on a corporate network, the To-Do Bar will display meetings assigned through other networked Office system applications, such as Access and OneNote. You can adjust the size of the pane, but I didn't find that it made the screen feel cluttered.

Until you mark a task done, Outlook will keep it in the To-Do Bar. To reserve time to complete a To-Do Bar task, you can simply drag it over into your calendar (by default the program will schedule a 30-minute appointment).

Easier Access

For many who use Office, one component--Microsoft's powerful database program, Access--has always seemed impenetrable, especially compared with the more user-friendly FileMaker Pro. Access 12 adds features that make the software more, well, accessible.

Getting-started templates, presented visually in the ribbon, guide new users through the creation of databases for specific uses--for example, tracking a collection or organizing an address book. The new version also makes it easy to reformat database reports on the fly: You can now edit each database field from the report view, a major improvement. And simplified query tools will help you extract the data you need without having to learn any special jargon.

Final Thoughts

Like its predecessors, Office 12 is a mammoth program suite, and most folks will never use all its features. I would have liked having the option to revert to the old interface--but the new design has its advantages, and the move to XML is clearly a good one.

Along with a host of less dramatic but potentially useful new features, these major innovations--at least as introduced in the beta--make for a more powerful and helpful productivity package.

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