On top of that, the free Open Office and its commercial version Oracle Open Office offer competent document handling at a much lower price, and cloud-based offerings such as Google Docs are improving fast, making a new Microsoft Office a hard sell if you take it in isolation.
But it is a different picture if you view Office as part of a collaboration platform built on Sharepoint. Two of the best new features in Office 2010 are simultaneous co-authoring and in-browser editing, but these require Sharepoint 2010 on 64-bit Windows servers. There is an option to use Microsoft's hosted services, so smaller organisations are not entirely excluded.
Alongside these collaboration features, Microsoft has fine-tuned the Office applications and made significant improvements. The previous release, Office 2007, introduced a chunky ribbon interface in place of menus, partly to improve usability - though some users still miss the menus - and partly, one suspects, to differentiate Office from rivals such as Open Office.
Good and bad in Office 2010
* Customisable and more consistent ribbon interface.
* Allows simultaneous co-authoring where Sharepoint 2010 is used.
* Numerous detailed improvements, such as Excel Sparklines and Word navigation pane.
* Limited benefits where Sharepoint 2010 is not available.
* High cost of Microsoft Office and Sharepoint platform.
* Office Web Apps have frustrating limitations.
A welcome upgrade, many small improvements, plus a good start with Web Apps.
Office 2010 is more of the same, with Outlook and Publisher now fully ribbon-enabled, but with a key difference: the ribbon can now be customised. A new right-click option lets you add or hide tabs and change the commands that appear on them, though the dialogue for doing so is somewhat ugly.
Microsoft has removed a feature of Office 2007 that caused confusion - the Office button. This is replaced by a file menu, though it is not quite like the drop-down menus of old. File opens a "backstage view" which occupies the entire application window, with options such as save, new and print. The extra space is used well, incorporating features such as recent documents, template selection and print preview.
Office 2010 review in pictures and video >>
64-bit testing capability
Office 2010 also introduces a choice of 64-bit or 32-bit versions. Now that 64-bit Windows is commonplace, you might imagine that 64-bit Office is the best choice. Surprisingly, Microsoft advises against it, and installs the 32-bit version by default. The reason is compatibility - 64-bit Office will not work with 32-bit ActiveX controls or Com add-ins, and some Visual Basic code will not run without modification, so 64-bit Office could break existing software.
Users with huge Excel spreadsheets will welcome 64-bit and the extra memory it enables, but for most users it will be nothing but trouble. Microsoft's main goal, Excel power users aside, is to let administrators and developers experiment with 64-bit in preparation for the future, though arguably it is not necessary for most client applications.
Office 2010 makes most sense where it can be used alongside Sharepoint 2010. In this scenario, you get smooth opening and saving from Sharepoint, and Web Apps for remote users (see box). A new application called Sharepoint Workspace, based on Groove, lets users create a synchronised offline store for Sharepoint, which is excellent for travellers.
On the other hand, for users who have little need of Sharepoint or simultaneous co-authoring, the cost of an Office 2010 upgrade from 2007 may be hard to justify, despite many small improvements.
The advent of simultaneous co-authoring in Word is a great technical achievement, though one that most users will only need occasionally. It is locked at the paragraph level, and limited to documents hosted on Sharepoint 2010. Document refresh is not instant, and in our tests we found it too easy to create conflicting edits.
Everyday users may be more impressed by the new navigation pane, based on the earlier document map feature, which lets you move sections of your document around as well as navigating quickly from heading to heading.
Like Word, Excel now supports simultaneous co-authoring, though unlike Word this works in Web Excel as well as in the desktop application. It also requires Sharepoint 2010.
After that, the best new feature is Sparklines - small charts which live in a single cell. Using Sparklines, you can show trends visually either alongside or behind your data. There are also improvements to pivot tables and pivot charts, making it easier to visualise multi-dimensional data. 64-bit Excel enables editing of spreadsheets larger than 2Gbytes.
Outlook e-mail is the most used Office application, according to Microsoft. Outlook 2007 smartened up the user interface, though it is still replete with confusing and hard-to-find options.
Outlook 2010 is no revolution, but it does add valuable enhancements. One is the ability to use multiple Exchange Server accounts.
Microsoft is also making a big deal of its improved conversation view, which is meant to group e-mails by threads, and allows you to clean up or ignore a "conversation". The snag is that sometimes Outlook forms threads just by looking at the subject heading, which is not a reliable way to group messages.
Outlook's new "social connector" integrates with providers such as LinkedIn, unifying enterprise and social media.
Powerpoint has enhanced video capabilities which allow users to embed video, crop it to the section they want, index key points for instant access and add styles and effects.
Simultaneous co-authoring in Powerpoint is enabled on Sharepoint 2010.
There is also an excellent feature called "broadcast". This is for scenarios where you are presenting to remote viewers. If you create a set of slides and choose broadcast, your slide show is linked to an online service. E-mail a special link to your virtual attendees, and they can view the show in Powerpoint Web App from anywhere, after logging in with a Microsoft Live ID.