Arik Hesseldahl

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Microsoft Unveils “New Generation” of Office Aimed at Tablets and Built for Cloud

Calling it a “new generation” aimed at “the modern office,” Microsoft let loose Office 365, the latest iteration of its ubiquitous productivity software.

The new software takes advantage of touch interface capabilities available on tablet devices, but also runs as a service in the cloud. “Your modern office thinks cloud-first,” CEO Steve Ballmer said in remarks at an event in San Francisco, where he also made reference to recent Microsoft acquisitions including Skype, the video calling service, and Yammer, the social enterprise collaboration service it acquired for $1.2 billion last month.

Signaling the importance of tablets to the new release, Microsoft VP Kirk Koenigsbauer demonstrated the new service on a Samsung tablet running Windows 8.

One of the most eagerly anticipated features is SkyDrive, which stores active documents on Web servers so you can work on them interchangeably at home or the office. It’s also seen as a response to Google Apps, the Web-based office suite that Google has offered for a few years, and which is seen in some cases as a fair replacement for Office — and it’s often free. Koenigsbauer said that SkyDrive already has 60 million users.

Koenigsbauer also demonstrated that Skype has been integrated directly into Office. He initiated a Skype video call from within Outlook. The feature has been available for awhile using Microsoft’s Lync video conferencing service, but it’s the first time that Skype, which has a lot more users, has been seen integrated within Office.

He also showed off the capabilities of Microsoft’s latest acquisition, Perceptive Pixel. An 82-inch high-definition, touch-sensitive screen connected to a PC running Windows 8 made Koenigsbauer look a bit like a TV weatherman as he pulled up a screen showing the weather in San Francisco, but he switched quickly to a sports application. Then he started a video conference with five other people, as if they were participants in a meeting.

Several demos also included hand-written markups using a digital pen or stylus, taking advantage of a Microsoft feature called Ink. Office has supported various iterations of digital pens for more than a decade, but Ballmer said near the close of the event that “Ink is becoming a first-class citizen” of the Office environment. Ballmer also hinted at new features coming by way of the Yammer acquisition, saying the “potential for new directions is quite high.”

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google