Do you need to have Microsoft Office on your PC? Because Word, Excel, and PowerPoint have become the de facto standards for word processing, spreadsheets, and presentations, it’s tough to do any sort of business on a computer without being able to read and edit files in those formats. But if you’re willing to make some compromises, there are alternatives.

The main complaints I hear about Office concern its cost. Office XP Standard costs $479 new, $239 for an upgrade. The Mac equivalents are $429 and $239, respectively. A special "small-business edition," which lacks PowerPoint, is much cheaper, but can be purchased only with a new computer, typically as a $150 to $200 option. If you’re just interested in word processing, Microsoft’s little-known Works Suite contains a full copy of Word and is an excellent buy at less than $100.

My principal criterion for an acceptable Office substitute is that it be able to open, create, and save files in Word, Excel, and PowerPoint formats with as little fuss as possible. Two old Office competitors, now reduced to minuscule market shares, can both do a reasonable job. But while cheaper than Office, Lotus SmartSuite, at about $390, and Corel WordPerfect, at about $340, remain fairly expensive. I took a look at two much cheaper alternatives, ThinkFree, and StarOffice. I skipped another alternative, gobeProductive because it lacks PowerPoint support.

ThinkFree is sold as a $49 annual subscription that includes 20 megabytes of online storage. You can download a trial version for Windows, Mac, or Linux and use it 30 times before being required to pay. A retail version should be available soon for about $70. The program can be configured to open and close Office files by default. The individual applications lack some features of their Office equivalents, but they’re adequate, especially for casual users. What I missed most was Office’s outstanding spell checker.

I ran into two big problems. ThinkFree couldn’t display some complex Word pages properly. It put images in the wrong place, for example, and mangled complicated tables. More seriously, the current version doesn’t understand the way Windows stores user files in the My Documents folder. In fact, if you’re using Windows 2000 or XP, it takes several clicks in the file-save dialog just to find My Documents. Version 2.0, now in trial, is an improvement, but it doesn’t fix the problem.

Where ThinkFree tries very hard to look and feel like Office, Sun Microsystems’ StarOffice 5.2 for Windows, Linux, or Sun’s Solaris goes its own way. In fact, in its default installation, it will pretty much take over your computer desktop, adding a Web browser and e-mail program to the standard applications. StarOffice’s word processor, for example, correctly handles proposed alterations made using Word’s "track changes" feature, which is widely used in business to collect comments on drafts. ThinkFree simply displays the document as left by the last reviewer, with all traces of editing erased.

The price for StarOffice’s power is complexity at least as great as that of Office, made worse by the unfamiliarity of the program’s design. In addition, while StarOffice can be set as the default application to open Office documents, there’s no simple way to save StarOffice files in Office formats automatically. When you do it manually, the program warns you that some formatting may be lost.

In the end, if you must work with Office files regularly, there really is no substitute for Office itself; the savings just aren’t worth the hassle. But if you are looking for a program for word processing and simple spreadsheet or presentation work at home, ThinkFree could be a good choice. And either ThinkFree or StarOffice might make sense for a small business seeking an inexpensive option to Office. But while both programs have their uses, neither poses much of a threat to Microsoft’s near-monopoly.

By Stephen H Wildstrom in BusinessWeek. Copyright 2002 by The McGraw-Hill Companies, Inc