Microsoft today launches the latest incarnation of its Office applications suite, Office 2003.

With office sales accounting for over a quarter of Microsoft's revenues, the software giant will be hoping that new features can persuade users to upgrade.

The suite adds new XML applications based around information sharing and collaborative working, also built into updates of old favourites like Word and Excel.

InfoPath, a new application, allows users to create their own XML forms and share the data with others.

Other features include a panel that allows Word users to view research data stored on the internet, and OneNote 2003, a note taking application that offers the ability to take notes in synchronisation with recorded audio.

Spam filters have been built into Outlook, and the whole package reflects Microsoft's new approach of turning off most features by default to reduce the effectiveness of cyber-attacks.

"There are a lot of small companies doing collaborative working with applications who will be viewing this move with apprehension," said Angela Ashenden, senior analyst for Ovum.

"To be fair this has been forecasted for the past 18 months, but Microsoft's marketing push in this sector will be bad news for them."

But while the application suite is tightly integrated, in some cases it requires users to run Microsoft's server software to get full functionality.

For example, its information rights management technology, which controls who can open, copy or print specific documents, requires the use of Microsoft Windows Server 2003.

Pricing is expected to be around £400, in line with Office XP, although this is yet to be confirmed.