While Microsoft faces a host of challenges in maintaining its market share numbers and persuading customers to upgrade to its 2007 Office System suite of products when released in the second half of this year, its competitors face an equally daunting task of winning users away from Office 2007 and growing their numbers.

Heading the list of challenges facing Microsoft is the fact that Office 2007 has a new user interface, which could require extensive staff retraining at a significant cost, as well as a new file format, which has the potential to create compatibility issues, analysts such as Joe Wilcox of Jupiter Research, told eWEEK.

When you introduce something new, it disrupts, and this increases things like help desk costs and employee downtime," Wilcox said. "So, to get to the benefits that come with this, they have to get past whatever retraining will be needed around the new user interface and any hardships around the new file format, which are always disruptive. These are two big hurdles Microsoft has to get around."

Another major obstacle confronting Microsoft is persuading users to upgrade to Office 2007. That is evidenced by user reluctance to upgrade to Office 2003 from Office XP and even Office 2000. The same could well apply with Office 2007, McNabb noted.

"Even though Office 2007 is very innovative and a compelling solution, it is a big endeavor for enterprises to undertake, and many of them are going to sit on the sidelines in 2007 and wait and see and learn from others' experiences," McNabb said.