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The new version of OneNote note-taking program comes with a radial menu designed for easy access with a thumb when holding a tablet. The approach may be expanded to other versions of the Office programs.

Microsoft is giving its first public glimpse of the next version of Office today, showing off an overhauled interface and new features intended to make Word, Excel, Outlook, PowerPoint and other traditional programs work on touch-screen tablets as well as computers with keyboards and mice.

The new Word interface aims to boost collaboration, with a comments pane similar to those found in social networks.  (Click for larger version)

But some of the biggest changes are in the way Office will be distributed — including a new Office 365 subscription service for consumers that shifts away from the traditional software licensing model, bundling in extra services including premium Skype features and extra SkyDrive storage.

The company is unveiling the new Office programs at an event in San Francisco today, featuring Microsoft CEO Steve Ballmer, and releasing a preview version for consumers. Watch the webcast here. The company hasn’t yet given pricing or a final release schedule for the new Office programs.

Microsoft CEO Steve Ballmer addresses the crowd at the Office unveiling in San Francisco. (Courtesy Kevin Lisota.)

It’s “the first round of Office that’s been designed from the get-go for Office to be a service,” Ballmer said at the event, calling it “the most ambitious release of Office” that Microsoft has ever undertaken.

With the changes, Microsoft is attempting to adjust to the new world of tablet computing and cloud productivity, where Apple and Google have emerged as fierce competitors. Microsoft says the new Office will work across platforms and devices, but the experience will be best on Windows 8 machines.

No official word yet on how an iPad version of Office will work, or when it will be rolled out.

The new Office programs minimize on-screen clutter, following Windows 8’s “Metro” style. Overhead menus and commands in the Office ribbon can be made to quickly disappear when users start typing. A “radial menu,” being tested in a new version of the OneNote note-taking program, puts commands within quick reach of the user’s thumb when holding a tablet. Outlook comes with new features intended to minimize the need to switch between different panes.

Microsoft is trying to make Outlook faster to use with new features that call up information such as calendar data without switching panes. (Click for larger version.)

Users will be able to sign into the programs using their Microsoft accounts. Documents are saved to the cloud by default, using SkyDrive for home users. Testing the new Office programs over the past week, I found the cloud storage seamless enough that I stopped thinking about which machine a particular document was on. As long as I was signed in, the document I needed was there.

Following in the footsteps of Windows 8, Microsoft Office will be attempting to straddle the worlds of touch screens and traditional keyboards and mice. For longtime users, the new interface will require an adjustment, but in my usage so far, I’ve found the transition less jarring than Windows 8.

In a major change, the company will give home users the option to subscribe to Office, rather than buy the programs, with a new Office 365 Home Premium subscription, building on its existing Office 365 service for businesses. The subscription, which can be used on up to five computers, includes a feature that will let users stream a full version of Office, with their personal settings and documents, to a Windows 7 or 8 machine even if Office hasn’t been installed.

Other benefits of Office 365 for home users will include an extra 20GB of SkyDrive storage and 60 minutes of Skype credit per month, to make calls almost anywhere in the world — one of the first signs of Microsoft building Skype into its products following its $8.5 billion acquisition of the company.

A feature called “Flash Fill” in the new version of Excel recognizes patterns from user actions in a spreadsheet and recommends auto-fill content. (Click for larger version)

Office 365 subscriptions will also include Office for Mac. Microsoft says versions of the new Office programs will be available across devices and platforms, including smartphones and tablets, although the company hasn’t yet released details about plans for native versions of Office on the iPad or iPhone. Microsoft also will continue to offer web versions of the Office programs for use inside browsers.

The company will still offer a standard version of Office without a subscription, known as Office 2013. However, people who buy traditional licensed versions of Office won’t  be eligible for automatic updates to future versions of the Office programs, as Office 365 subscribers will be.

“When you buy a subscription, it’s not just a payment plan on a static thing. It’s going to better over time,” said Chris Pratley, general manager of technical strategy for Microsoft Office. “New features will show up. It’s going to be a new world, constantly improving.”

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