Details scant on Longhorn specifics

Microsoft officials tell financial analysts few new details on next major Windows upgrade

REDMOND, Wash. -- Microsoft Corp.'s chief financial officer, John Connors, yesterday talked up the "innovative pipeline" that will ensure that new products and technology keep rolling out through future years.

But "future" was the operative word at the annual financial analyst meeting here when it came to the next major version of Windows, because that was the sum total of direction that Microsoft provided about the final ship date for the release code-named Longhorn.

"We've made really good progress in the last year. The next milestone for us is getting the beta out sometime next year and that'll be the point at which the feature set and the schedule will really be pretty much locked down," said Bill Gates, Microsoft's chief software architect. "It's a release that's driven by the breakthrough features, and we'll have a strong sense of exactly what gets in and what the schedule looks like as we get that beta out sometime in the next ... well, next year sometime."

Gates didn't say the beta would be released in the first half of next year, as the company had been saying prior to last week. If the beta should slip to the second half of the year, that could have a snowballing effect on the final ship date and potentially push the product beyond the 2006 target that the company has bandied about.

"It's a big release, and pulling together that many pieces in an integrated fashion, it's bigger than anything we've ever done," said CEO Steve Ballmer. "I always tell our people relative to our scale, it's a lot more like Windows 1.0, maybe 3.0 than anything we've done before. It's a whole new development platform, and getting the whole new development platform done is harder than just making incremental improvements in user and administration features. We're working hard at it."

Other new technology that Microsoft demonstrated included an improved search engine and the upcoming Visual Studio 2005 Team System, which includes new tools for operations managers, architects, project managers, testers and developers.

Yusuf Mehdi, vice president of the MSN information services and merchant platform division, demonstrated how Microsoft's new search technology can be used not only to find information on the Web but in local files on a PC. He said the effort is being worked on by engineers on the company's Office, Longhorn, research, knowledge interchange and MSN Search teams.

"I'm not giving a ship date out there," Mehdi said. But he added, "The progress is actually very good. This code is working very fast. It has been based on years of work in the company. It's not like we just started the thing a couple of weeks ago. We have made a lot of progress in the last couple of months on it. And this service is going to be one way I think we'll really move beyond what's out there today."

On the tools front, Microsoft's Visual Studio Team System builds in new capabilities for modeling, testing, change management and collaboration. The company previously relied on partners such as IBM's Rational software division, Mercury Interactive Corp., Compuware Corp. and Borland Software Corp. to fill in those gaps. But Microsoft is pledging a more integrated experience for customers that surpasses anything third parties can offer.

"Work items are integrated throughout Visual Studio, and they enable teams to communicate and collaborate about information related to bugs, requirements, status, deliverables and more," said Prashant Sridharan, lead product manager of Visual Studio.

Other new innovations that Microsoft has in its pipeline include new Tablet PC software, a new Media Player and media enhancements, 64-bit Windows, SQL Server 2005, System Center 2005, a new Speech Server and new antispam technology.

Connors said Microsoft has "never had this breadth and depth of product innovation to sell," and the company expects every single one of its businesses to improve in fiscal 2005, which began July 1. But he also cautioned that with businesses that had more than $1 billion in adjusted operating income growth from fiscal 2003 to 2004, "you shouldn't expect a similar growth in the '05 time frame."

"FY '05 should be a good year. Hopefully it can be a great year. It would be tough to describe it as a terrific year, in terms of the percentage growth we've seen in '04, but we're going to work hard to have a great year," Connors said.

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