I predict this will be wildly successful. It looks to be fatally attractive to any business person who can't think ahead far enough to see the consequences (99.937%).

This will close the last escape routes to business users of Windows. Businesses will be paying a fee to Microsoft for every employee until the end of time, or until the business folds under the weight of Microsoft fees.

It is also very bad news for AOL.

Now, with more details, I will start seriously preparing my business clients for this. Most will not be able to escape it because their business partners will insist on it.

Prepare the sheep to be sheared and the lambs for slaughter.

It's not Office itself that is the deal, it's the interbusiness and intrabusiness communications, cooperation and coordination features that will be the "killer app" here. Companies will be setting up their "Community space" and other applications, and their vendors and business partners had damned well better participate.

Some of my clients communicate with their customers primarily with email attached Word and Excel forms - sent, filled out and returned. This will eliminate the sending and returning part. It'll all be done on .NET servers.

Note the built-in discouragement for upgrading from subscription to "Pro". You lose your subscription attachment to the .NET servers. The objective is to get as many businesses and employees addicted to the subscription features as quickly as possible.

This thing has the potential of giving Microsoft complete control of interbusiness communications among small and medium businesses. I'm sure they understand this, and I'm sure that's precisely what they are after.

Yes, in big companies, only a limited number of people will be on the subscription, but in the smaller companies they deal with, everyone will have to be on subscription to access colaborative features. That eliminates most of the piracy, and incompatibilities with versions that don't require registration will fix the rest.

. . more the interface among companies than the internal workings of a large company. Many of the companies I work with are so shallow there really is no "internal". All systems face customers, partners, vendors, and their own outside sales reps. This is common with wholesalers, importers, small manufacturers, professional organizations and the like.

When a customer (who is often much larger) says "this is how you will communicate with us", then that's exactly the way you communicate with them. If this happens to be EDI, then you contract with an EDI service. If it means upgrading to Office XP, you do that. If it's .NET, then .NET is what you use.

I think many companies will start by using this stuff for their own outside staff and branch offices, for which it looks very attractive. Then they'll start insisting partners and vendors use their established communications methods.

The process will be accelerated by basic service being very low cost - and it will stay low cost - but more and more "add-on" services will become more and more necessary to use the system effectively. These will be bundled and unbundled and rebundled constantly, with ever changing costs - and always "in response to customer demand".

The fact that a bunch of big company IS departments are dragging their feet on upgrading internal systems becomes less and less important in the overall picture.