Microsoft Office 2007 features top-to-bottom rewrites of Word, Excel and Powerpoint, with ribbons replacing the familiar menus and toolbars. There is another change lurking under the hood that might affect you even if you don’t buy a new computer and start using the Office 2007 programs.

All three programs save files in new formats by default – .DOCX, .XLSX, and .PPTX. If you’re running Office 2003, a window will be displayed when you try to open a .DOCX or .XLSX email attachment for the first time, explaining that a free “compatibility pack” is required before you can open the file.

The “Microsoft Office Compatibility Pack for Word, Excel, and PowerPoint 2007 File Formats” is a 27.5Mb download that installs quickly and does not require a restart of your computer. It can be installed anytime – there’s no harm in putting it on now, even if it hasn’t come up as an issue yet. There’s more information from Microsoft about prerequisites and potential issues on this page.

When the Compatibility Pack is installed, you can open and save in the new Office 2007 file formats.

So what’s it all about?

There were some problems with the old formats. They created overly large files; they were insecure; and they were prone to becoming corrupted. The new formats address all of those problems. But there’s more. This is about money.

The old formats were proprietary and Microsoft guarded their secrets jealously, trying to keep competitors from making programs that could potentially compete with Office. In the last ten years, advocates of open formats began to make inroads in the world of public opinion – and more importantly, in large corporations and governments – with arguments about the disadvantages of proprietary formats and expensive office suites.

Someone once said that Microsoft’s revenues are essentially divided between Fortune 500 companies, on the one hand, and everybody else, on the other hand.

When Microsoft develops a new program, they hand a CD to a Fortune 500 company in exchange for Brinks trucks full of gold bullion. The Fortune 500 company then does all the work of rolling out the program and supporting its users.

When Microsoft sells a program to us, we resent paying $80 for it and we want to call Microsoft for support all the time. Make no mistake – Microsoft would not lose much sleep if all of its customers left except the Fortune 500 companies.

Microsoft decided it had to change direction to protect Office’s position in large corporations and governments in a changing world.

Almost ten years ago, Microsoft began to develop “Office Open XML” with the intent of creating an open international standard. In 2005 the project was turned over to an independent company for further development and dissemination into the open source and software developer communities. These are not “Microsoft” formats any more; they are fully documented standards that can be used by anyone.

In April, the Geneva-based International Organization for Standardization (ISO) approved Office Open XML as an international standard. Here’s an article about the ISO ratification. Governments and large corporate customers are frequently under pressure to buy ISO-certified products; now they can continue buying Microsoft Office with no apologies. Other companies can make word processors and spreadsheets that save files in the identical formats but big companies are slow to change and will continue buying Microsoft Office for a long time to come – especially now that its foes can’t attack it for being non-standard.

There are no consequences for those of us using Word at home or in small businesses – this battle was fought bitterly between Microsoft and IBM about issues that only matter to large organizations. There’s no downside for us, though – use the new formats freely.

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