Chris Capossela, a Microsoft Business Division senior vice president, is gearing up for the upcoming launch of Microsoft’s Office 2010 products. In a recent interview, he talked about efforts to upgrade the venerable Office programs by giving them new social networking features and offering web-based versions of Word, Excel and other traditional software programs, pitting Microsoft more directly against Google Docs.

Q: What’s on your mind as you get ready for the Office 2010 release?

Capossela: The high-tech industry is such a fun, interesting place to work, and Office is one of these products that serves the needs of grammar-school kids doing show-and-tell -- with PowerPoint, often -- all the way up to the largest governments in the world and the largest businesses in the world. And so it’s always a wonderful challenge to think about the new ways people want to work, and how the world changed around us.

Q: One thing the company is doing along those lines is adding the ability to access social networks inside the Outlook email program.

Capossela :The Outlook Social Connector, it’s my killer 1-minute demo these days. I literally just turn my laptop to show a CIO the ability to see the photos of everyone who’s on the email, the ability to click on one of the photos and see my relationship to that person, as it relates to the emails we’ve shared, the attachments we’ve shared, the calendar requests we have in common. Their status updates from SharePoint, from Facebook, from LinkedIn, from MySpace, from Windows Live. Their eyes sort of light up. It make Outlook social, it turns it from being a very transactional email-oriented thing to beng much more about the connections I have to the people I work with.

Q: Microsoft is also adding more social-networking features to its SharePoint program, for collaborating inside companies. But people in their 30s, 40s and 50s didn’t grow up with online social networking. Does that mean those tools will be adopted more slowly inside companies?

Capossela: It’s always so interesting -- in the high-tech world, there’s a thirst for immediate adoption. “If this isn’t immediately adopted, it’s dead.” I think Microsoft has a little bit more of a patient view. It took SharePoint seven or eight years to get to $1.3 billion in revenue. Some people think seven years is an eternity. But anybody who has been around for a while would say seven years, that’s fast.

It’s not Facebook fast, but it’s fast.

Capossela: Exactly. And I think it will take time for people to come up that (social networking) curve. But I think that’s OK. I think there’s definitely the ability for that to happen. I recently went to Japan, and I was meeting with a CIO of a very established manufacturing company, and he was the CIO, the top dude when it comes to technology, and he said to me, “I will never understand social networking. I will never use it. But I know we will provide it inside our company. It is the future of the way people will communicate and collaborate, I know that.”

Q: Microsoft is bringing Office to the “cloud,” as they say, with Office Web Applications that run inside web browsers. What types of adoption rates are you expecting there?

Capossela: Well, I definitely think that people will quickly adopt them, because the value of being able to access Office anywhere is so strong. The ability to put your documents in the cloud and be able to get to them from any PC is really lovely, and so I think the adoption rate will be quite high.

Q: Internet Explorer 9 will let online applications tap the power of the computer’s graphics processor in a way that PC applications traditionally have. Could that make traditional PC software less relevant?

Capossela: I think that the notion that there’s local computing is really the key notion. I don’t subscribe to the notion that PCs will just turn into dumb terminals, and the hardware won’t be interesting, and the graphics processor won’t be interesting. I think that’s what a lot of people believe when they hear the word “browser.” They hear zero installation, zero footprint, and those are wonderful things, and we’ll deliver them through the web apps, but the more and more you’re requiring somebody to install something special, then it feels a lot more like rich client (traditional PC) software. Rich client software, I think, is going to be here to stay.