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Microsoft Office 2016 launches Tuesday

Microsoft 2016 Delve Microsoft 2016 Delve
Microsoft 2016 Delve Microsoft

As expected, Microsoft is pushing out the latest version of its cash-cow Office application suite on Tuesday.

Office 2016, the base components of which are Word, Excel, and PowerPoint, now lets team members work together on Word documents in real time. It will add that capability to the other Office apps over time according to a blog post by Kirk Koenigsbauer, the corporate vice president for Office Client Applications and Services.

The company is pitching Office 2016 as a perfect complement to its newly available Windows 10 operating system although Office 2016 will also work with Windows 7 Service Pack 1, Windows 8 and Windows 8.1, a spokeswoman said.

Microsoft (MSFT) also added Skype for Business to the mix so users can, from within their Word documents, talk or video chat with colleagues, partners or customers.

And Microsoft also made available a private preview of GigJam, a tool that promises to let workgroups collaborate across devices and applications, which Microsoft will add that to the Office 365 mix next year. Office 365 is a the new umbrella term for Microsoft applications delivered online as a subscription service, although people can still buy shrink-wrapped versions of Office 2016 at retail. List price of the student version is $149; the home and business version lists for $229 ..

Microsoft is moving the whole Office franchise to this software-as-a-service delivery model pioneered more than a decade ago by Salesforce(CRM), in the customer relationship management arena. The company does not disclose how much of the current Office sales mix goes by one-time retail purchases, PC bundles or the subscription model

Microsoft Office long dominated business accounts but in the past few years has seen fierce competition from Google (GOOG) Apps, an array of word processing, spreadsheet, and presentation applications which undercut Office on price and gained traction among startups and younger users.

Microsoft and Google are also locked in a battle to get customers to store their work and personal documents in their respective Microsoft OneDrive and Google Drive cloud storage repositories.

The transition from a big-bang up-front license sale to a longer-term subscription sale can be initially painful for legacy IT vendors used to the older model, but that is the way of the world these days.

In his blog post Koenigsbauer also said that with the Office 2016 “subscribers can expect to get more frequent updates with new features and improvements.”

Check out Fortune’s interview with Microsoft chief executive Satya Nadella for more on the company’s Office, Windows, and cloud strategy.

This story was updated at 10:04 a.m. EST with additional details about Office 2016 operating system requirements and retail list price.

For more on how Microsoft is combatting Google threat, see the video below.

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