(FORTUNE Small Business) – Microsoft seems to have finally figured out what the rest of us have known for a long time: How many more features does anyone really need in an office suite? There will be another upgrade--the cleverly code-named Office 11 is expected in mid-2003. So what's next? The company has just begun to discuss its plans, but it seems to be placing far greater emphasis on what's happening behind the scenes than on significant changes to the interfaces and features of the programs themselves.

The biggest news surrounding Office 11 is Microsoft's embrace of a universal standard (known as XML) that makes it far simpler to use and share data. I'll spare you the gory details about how XML works, but suffice it to say that because it separates the content of a file from its formatting, the user no longer must worry about his file's compatibility with other operating systems or software programs. Office would become your standard way to create or view new information, letting you export a new white paper to your website or import data from an inventory application to create reports on quarterly sales. That could save significant time and money, but to reap those benefits, you have to know XML (or know a consultant who knows it) and do custom development, so expect to spend time and money before you start saving any.

Getting users to work together continues to be a major Office initiative. In the last version (Office XP), the new tools that let people edit a document at the same time as their colleagues were less than ideal. Office 11 tries to address those problems. First, you'll be able to lock pieces of documents so that it's clear what's open for discussion and what's not. And if you're running Microsoft's SharePoint collaboration software on your network, you can save a copy of a file to a centralized location, allow a number of people to work on the document at the same time, and be notified as each person makes changes. You'll also be able to send instant messages to co-workers as you all handle the document--provided you employ Microsoft Windows Messenger to do so.

New changes to Outlook suggest that Microsoft at long last understands that many users not only check e-mail in the office but also at home and on the road. Outlook users in an office running a Microsoft Exchange mail server have long complained that checking e-mail over a dial-up connection can take a ridiculously long time. Office 11 enhancements will let them tell Outlook whether they're using a dial-up or broadband connection or are (gasp!) not connected. Outlook 11 also introduces myriad new ways to handle e-mail--including viewing all mail that's part of the same discussion, a boon when you come back from vacation.

And for those who have been burned in the past, fear not: Office 11 will keep all the same file formats as recent versions.

It's too early to say whether Office 11 will be a must-have upgrade, but we'll be tracking its development in the months ahead and will review it when it's ready to ship. That gives you at least six more months to learn all the features that you already have but have yet to explore. --Josh Taylor