Microsoft turns to Elixir for Office boost

Convincing businesses to upgrade to new versions of Office is a perennial challenge for Microsoft, but the company hopes a new Elixir might speed things up.

An effort, code-named Project Elixir, will take shape later this year as a way to promote Microsoft's Outlook e-mail and contact program, with some additional fields, as a tool for viewing customer relationship data. Eventually, the plan could help the software giant elbow its way further into the customer relationship management market, where Siebel Systems, Oracle and SAP dominate.

Microsoft started doing this internally last year, using Outlook as a means for its sales force to access a data warehouse linked to the company's Siebel CRM software.

Microsoft is currently in the process of trying to take that internal effort and transform it into a set of software tools that other companies can use. Although the company used Outlook internally with Siebel products, it could be linked to a variety of other customer relationship management programs. Interest from outside customers has been high, Charles Fitzgerald, Microsoft's general manager of platform strategies, told CNET News.com.

While Microsoft doesn't expect to generate revenue from offering Elixir, it does stand to benefit when companies tie Office deeper into their business processes. Since the Elixir code Microsoft has developed works only with Office 2003, the company sees the tool as a way to get customers to upgrade. Longer term, such tools may also spur sales of Windows Server and other software.

"It works with Outlook 2003, so it drives both revenue and deployment there," Fitzgerald said, noting that a demo of Elixir recently helped convince one reluctant chief information officer to upgrade to Office 2003.

Driving upgrades to the latest version of Office is important both because of the revenue it generates as well as the fact that the company has noted consistently higher customer satisfaction when businesses are using later versions of its products.

Microsoft's Information Worker unit, which is responsible for Office, contributed roughly 30 percent of Microsoft's revenue last year, so driving new sales and upgrades is an imperative for the software maker. The company is looking to drum up interest in Office by offering add-ons like Elixir, by hosting the first-ever Office developer conference next month, and through an emphasis on server software that links to Office.

There is also a longer-term benefit to Microsoft. When companies adopt things like Elixir, it makes them unlikely to even consider rival productivity software. And because Office doesn't run on Linux, it also gives Windows a boost among businesses and governments that might be eyeing the open-source operating system.

"The more Microsoft can get companies to integrate Office technology into the fabric of their businesses, the less of a commodity Office becomes and the harder it is for companies to replace it with something like OpenOffice.org," said Gartner analyst Michael Silver.

The company had hoped to have the tool ready to offer broadly to customers by the end of last year but found there's still a lot of custom