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Microsoft has removed two key components from its upcoming Office 10 offering, a move that will hamstring companies seeking to elevate plain old Exchange messaging systems to full-blown platforms for handling collaborative applications.

At its annual Exchange Conference in October, Microsoft unveiled with great fanfare its Local Web Storage Systems and Office Designer. Both were to be new features of Outlook, scheduled to ship as part of Office 10 in the first half of next year. Now the features won't likely be seen until the end of 2002.

The features were conceived to work hand-in-hand and rely on Exchange 2000 to create a platform for designing collaborative Web-based applications that could be used offline. Such applications might include workflow applications for approving purchase orders and Web-based applications for employee benefits enrollment. These applications would go far beyond simple file swapping with e-mail attachments.

But just recently, the features were removed from Beta 2 of Office 10 after testers reported substandard performance and stability and a blizzard of bugs.

Now, IT executives will have to stick with Exchange public folders to support collaborative applications. Public folders are often difficult to use and are generally considered much less sophisticated than what's offered by rival Lotus Notes.

"In the coming year we want to develop Exchange into a more collaborative platform rather than just a messaging system, and anything that is an improvement over public folders would be welcomed," says David Ellis, senior technical analyst with Carlson Shared Services, a travel, hospitality, and marketing firm. "There is always a need for access to data; you can't always be online. Microsoft has to address that issue."

Office Designer is a development tool, while LWSS is much like a client-side cache. LWSS is the client companion to the Web Storage System in Exchange 2000, a catch-all repository for files and applications.

The biggest loss is LWSS, which would have allowed users to bring applications down to Outlook and run them offline before synchronizing or replicating data with Exchange. Replication is a marquee feature for Notes, the top competitor to Exchange, and Microsoft thought it would finally match Lotus on that front.

Microsoft now has no compelling answer to that feature.

In addition, Lotus has begun shipping its Bluejay suite, which allows Outlook to work with Lotus Domino Server and offer replication using an Outlook plug-in called iNotes.

"I've seen a double-reverse in football, but you don't often see them in software," says Dana Gardner, an analyst with Aberdeen Group. "Microsoft has said they don't need replication, then they reversed and introduced Local Web Storage Systems, and now they've reversed themselves again."

Microsoft has shelved Office Designer and LWSS indefinitely, according to Chris Baker, lead product manager for Exchange. "We are reevaluating how replication will be done."

With a new version of Office released about every 18 months, replication likely won't be addressed until the end of 2002.

"We are really focused on Office 10, and I hate to make any predictions beyond that," says Lisa Gurry, product manager for Office. But she did say the features would not be added through a service pack.

Gardner questions whether the move may relate to a conflict over a long-brewing strategy to offer a hosted version of Exchange and how it will impact .Net, Microsoft's strategy to develop software as a service that runs on the Internet. One of .Net's many and loosely defined promises is to create anytime, anywhere availability to applications. A key to fulfilling that promise is the option to work with applications offline.

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• LWSS,
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• Exchange 2000,
• replication