In a blog post earlier this week, Microsoft's manager for Office standards Jim Thatcher described upcoming changes to Office:

In the next release of Office, we have added two additional formats for use: Strict Open XML and Open Document Format (ODF) 1.2. We have also added support for opening PDF documents so they can be edited within Word and saved to any supported format. By adding support for these standardized document formats, Microsoft Office 2013 provides users with more choice for office document interoperability.

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In those dry words we find echoes of a history lesson that demonstrates the power of open source to create valuable competition and innovation in software markets. File formats may not be the most obviously exciting topic, but this announcement casts light onto two important facts about open source: First, open source software can be the perfect competitive pacesetter. Second, open source innovation provides giant's shoulders upon which others can stand.

The triumph of ODF

Back at the start of the last decade, Microsoft Office had chased away almost all competition in the productivity software market. Into that near-monopoly, Sun Microsystems launched an open source project in 2000 based on the niche office suite StarOffice. Known as OpenOffice.org, it gradually built momentum as the open source alternative to Microsoft Office.

While some people were quick to accuse OpenOffice.org of being derivative of Office, it actually paralleled Microsoft's first version of Word (in 1983 for Xenix), having been created in 1984 targeting the popular home computers of that era: the Commodore 64 and the Amstrad CPC under CP/M. It later evolved into an Office Suite for DOS, IBM'S OS/2 Warp, and Microsoft Windows. When Sun Microsystems acquired OpenOffice.org in 1999, it was a comprehensive and capable multifunction application available on all popular platforms of its day.

On arrival at Sun, the StarOffice/OpenOffice.org developers accelerated a project to create a modern, XML-based file format for their suite. By using an XML-based format, it was much easier to promote both interoperability with other office tools, as well as to maintain compatibility from version to version.

That second issue was the bane of all users of office tools, so Sun took the initiative to go to the OASIS standards organization and propose a solution: a standardized file format for office productivity. I was involved in that activity and know for a fact that Sun approached other OASIS members to collaborate on the project. However, Microsoft declined, calling the proposal "redundant." After all, the company made big money from the "upgrades" that resulted from the social pressure applied by Word users each time the file format changed.

OASIS agreed to the proposal, and the result was the OpenDocument standard, ODF. Despite a slow start, ODF adoption snowballed; today, it is an ISO standard and an approved national standard worldwide. The resulting pressure on Microsoft became huge, and the company responded by manipulating the international standards world to create a competing XML file format standard based closely on the formats used in Microsoft Office. It was finally ratified by ISO in 2008.

It took about seven years, but Microsoft relented. In April, the company announced it would fully implement in Office 15 both the Office-based standard it forced through ISO (standard ISO/IEC 29500, called OOXML by most people) and the community-driven open standard it emulated (standard ISO/IEC 26300, called ODF by most people).

Open source changed the market, forcing Microsoft to respond and embrace both version-to-version file compatibility and the concept of interoperability. Without open source, none of this would have happened. With open source, even if you aren't actually using ODF yourself, you benefit from a competitive and reinvigorated market.