Microsoft announced today that it will be introducing new, XML-based file formats for three core Office applications in the next version of its productivity suite, which is currently known as Microsoft Office 12. Microsoft Word, Excel and PowerPoint will all default to storing files in Microsoft Office OpenXML format

To denote the new format, Microsoft will append an 'x' to the file extensions: .DOCX for Word; .XLSX for Excel; and .PPTX for PowerPoint. Files stored in these formats will actually be compressed ZIP files that include the underlying XML as well as any images used in the document.Microsoft contends that the new format will tend to make documents smaller and provide better error recovery.

The current versions of Word and Excel in Office 2003 can also store files in an XML format, although it's not the same schema as the new OpenXML. Microsoft will make an update available for Office 2000, XP and 2003 that will let them read and write OpenXML files. In addition, bulk file converters will be available. Microsoft says that OpenXML will be fully documented and royalty-free so third party applications can work with the files.

"The bar for us in terms of backwards compatibility is huge," Jean Paoli told PC Magazine in an interview. Paoli, who is also recognized as one of the fathers XML, added "We go back to [Office] 2000. So we really believe we cover what is a huge percentage of our installed base"