Microsoft today announced that its Office System 2003 was completed and had been sent to manufacturers.

The various products in the system will be made available for bulk buy on 1 September (no price until then) and machines with Office 2003 pre-installed should appear by the end of September. It will be available in shops worldwide from 21 October, marked with a big bash in New York.

There are no big surprises as to what the product suite contains and will do, but its success is very important to Microsoft and could mark an important point in the software industry. The big selling point for Office System 2003 is the strong support each component has with XML.

XML is the flexible and widely adopted Internet protocol that makes Microsoft look as though it is opening up and embracing competition and innovation from other companies. What it will do is make different Office products worked together much better and greatly increase companies' flexibility in how they use and apply their computer systems. It will also make company intranets far easier to build and maintain.

For example, Word docs can be saved in an XML format defined by the company itself. It can then be pulled into Excel or Access or PowerPoint simply, easily and quickly without any fiddling about. This fact sparks off all sorts of marketing speak about synergies, collaboration, downtime etc etc.

The collaboration aspect is quite important and is what Microsoft believes is a big winner - mostly because it finds it so useful internally. Whether other companies will embrace the ability for workers to chop, change, approve and review documents from different ends of a network, at the same time and all electronically is something that will have to be seen.

But "document workspaces" and "task panes" will make all that possible and Microsoft has also integrated instant messaging in with it too, offering a potentially useful facility and of course screwing other IM competitors by abusing its power.

Outlook 2003 has "network awareness" included in it, which means it will bear in mind what connection the person has to the network and so theoretically make life easier for mobile workers. It will also include better spam filters. Others components are: new versions of Visio (charts/graphics), FrontPage (web pages), Publisher (web publishing) and three new programs - InfoPath 2003, Live Communications Server 2003 and OneNote 2003.

InfoPath 2003 is a form-based bit of software for gathering and sharing information. Live Communications Server 2003 is the instant messaging bit. OneNote 2003 is like an electronic yellow sticky-note application.

Microsoft is also making big play of the fact that the suite has been worked on by over 600,000 beta testers - three times more than normal - and so it's going to be the least buggy bit of MS software yet. We shall see. It's just as likely that with the huge interoperability built in, Microsoft feared the whole thing would go horribly wrong within a fortnight of release. You can look at the later-than-planned release of Office System 2003 whichever way you like.

Prices have not yet been officially released but Amazon UK is already taking advance orders for the software. And according to the company, Microsoft Office 2003 for XP, which is Word, Excel, Outlook and PowerPoint, will cost £349.99. The Professional version with Outlook, Publisher and Access is £429.99. The Student/Teacher version is £119.99 and the Small Business edition (minus Access) £384.99.

This is a slight increase on the existing Office XP packages and on a straight conversion from the released US prices. However a Microsoft spokeswoman told us that the company does not impose its prices on companies and they can charge what they like, so the exact UK list prices are still unknown at the moment.

Here's what Steven Sinofsky, senior vice president of the Information Worker Group at Microsoft had to say: "The release to manufacturers of the Microsoft Office System is a milestone, not only in terms of the unprecedented development and testing work that went into it, but also because it enables customers to piece together data and operational aspects of their business where the real work happens: at individuals' desktops.The value of software is measured in how you use it, and never before has it been so easy for businesses to derive such incredible value from their software investments."

So there you have it. This one is important to Microsoft - Office has been becoming less popular over the years and the emergence of Linux and a wide range of open-source applications that do the same as Office applications is worrying the company.

Especially since Oracle and Sun have got together to encourage people to use their Collaboration Suite and StarOffice suites repsectively. Last month, senior Sun VP Stuart Wells laid down the battlelines: "Oracle Collaboration Suite on Sun systems provides a solution that helps solve major issues for customers using enterprise messaging applications, especially cost, security and complexity. At the same time, the interoperability and availability of StarOffice as an alternative office-productivity suite allows customers to cut their tether to Microsoft's pricing schemes and frequent security breaches."

Let battle commence.