XML will become the default format for Office 12, Microsoft has confirmed.

The fact that XML was going to play an important role in Office 12 was already known, but the degree to which it will be incorporated is only now becoming clear. More details about the next iteration of the popular software are expected next week,

XML (Extensible Markup Language) began creeping into Microsoft's Office suite in its Office 2000 release, but support was minimal. That was extended in Office 2003, for which Microsoft released schemas so developers could tap into Office data. The new file format, called Microsoft Office Open XML Formats, will push it even further as it becomes the default for Word, Excel and PowerPoint.

"Customers have told us that they value the ability to create inter-operable systems," said Dan Leach, a Microsoft group product manager. Specs for Microsoft's new format will be published online and covered by a royalty-free licence akin to the one it used for its Office 2003 XML schemas, the company said. The change means Microsoft's famous .doc file format will be replaced by a new designation, .docx.

The new format will be a significant change for developers, but Microsoft is eager to avoid the compatibility problems that cropped up with past Office revisions - most notably Office 97, which posed rocky transition problems. Microsoft plans to issue patches for Office 2000, XP and 2003 to enable those versions of its software to open, edit and save files in the new format. Office 12 will also allow users to override the XML default and save files in Microsoft's older formats. Microsoft hasn't yet decided whether the patches for prior Office versions will only be available to users running legal copies of the software, Leach said.

Microsoft's new XML format will differ from its earlier XML efforts. The new format uses Zip compression to create smaller files, and it segments data within files to be stored in separate components, a feature Microsoft expects will make it easier to recover partial data from damaged files. The segmentation can also have security advantages - for example, selected data segments, such as document comments, can be stripped out.

Analysts generally praised the move as a useful one for Microsoft's customers. "There will certainly be a hump that users have to get over, but it's going to be welcome for developers to have," said AMR Research analyst Jim Murphy. "It makes customising applications more accessible and appealing."

Better XML support will make it easier for developers to pull enterprise data into Microsoft applications, but it also unlocks Microsoft's own applications and potentially makes them of broader use, said Jupiter Research analyst Joe Wilcox. Masses of enterprise data tied up in Word or Excel files could be more easily integrated with corporate sales or accounting applications, like ERP (enterprise resource planning) systems.

AMR Research's Murphy sees Microsoft's standardisation as a somewhat defensive move. "Microsoft was in a spot where it was hard to convince users there's a reason to upgrade from 11 to 12," he said. Office is already saturated with features; integration is one of the few new advances Microsoft can offer. "Now it becomes more of an integrated suite," Murphy said.

Microsoft plans to further discuss its Office plans and provide draft versions of its new specifications at TechEd, which opens Monday in Orlando, Florida. Office 12 is scheduled to enter beta testing in late 2005 and to ship in the second half of 2006. A preview site for the software is expected to go live on Monday on Microsoft's website.