Microsoft expected to unveil update to Office suite

— -- Microsoft on Monday is expected to unveil new software features crafted to jazz up Office 15, the next major upgrade of its ubiquitous suite of office-productivity programs.

Much is at stake. The software giant's core engine of profit — selling licenses for Windows computing systems packaged with the Office suite that includes Microsoft Word, Excel and PowerPoint — is under intense pressure as competitors roll out products aimed at taking away market share.

Office 15 is expected to be available early next year, bristling with hooks into Windows 8, the latest upgrade of its operating system software, which will be generally available this October. Some 84% of the world's personal computers run on Microsoft's Windows. But many of Microsoft's corporate customers still use an earlier version of the operating system, Windows XP. And those on the current version, Windows 7— out since 2009 and paired with Office 2011 — could stand pat and opt not to upgrade.

"Skipping a version or two saves costs, and often, the new features are not critical to them," says Jack Gold, industry analyst at technology consulting firm J. Gold Associates. "It's critical for Microsoft to show real benefits to upgrading."

What's more, Google is pushing hard to get Office users to switch to Google Docs, an Office-like applications suite running on Google's servers and accessible on the Internet. And Apple is championing the notion of performing clerical duties on the iPad tablet PC, which uses a touch-screen interface, instead of a traditional keyboard. Neither Office nor Google Docs work on the iPad.

Office loaded onto a desktop or laptop Windows PC remains by far the planet's dominant clerical tool. It accounted for $22.2 billion of Microsoft's nearly $70 billion in fiscal 2011 revenue and $14.1 billion of operating income, far more than any other of the company's business units.

"If Office 15 is a bust, those repercussions will impact and potentially injure virtually every part of Microsoft," says Charles King, principal analyst at research firm Pund-IT. It could hamper Microsoft's current push to gain a bigger foothold in search advertising and home entertainment, he says.

The company has kept tight wraps on Office 15, resulting in rumors that it might include the ability to edit Adobe PDF documents and even be able to run on the iPad. "The more devices Office 15 is available on, the better it is for Microsoft," says Trip Chowdhry, managing director of Global Equities Research.

Others, such as King, say it is more likely that Office 15 will run exclusively on Windows 8, or on Windows 8 and Windows 7. Windows 8 is a touch-friendly operating system. Scheduled for general release this fall, it will come in a version for PCs and another to power Microsoft's new Surface tablets.

Key advances are likely to come in Office 15's capacity to mesh with the Surface tablets, Microsoft's challenger to the dominant Apple iPad, and in hooking Office 15 into Microsoft's free Internet-accessible services, says Wesley Miller, analyst at technology research firm Directions on Microsoft.

One thing seems certain: When Microsoft CEO and chief pitchman Steve Ballmer takes center stage at a Monday press conference, he likely will tout Office 15's touch capabilities.

"Microsoft hasn't had a large amount of time to broadly overhaul these applications, but I believe a large percentage of the time has been spent ensuring that the applications are touch-centric." Miller says.