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Saturday, August 28, 2004 - Page updated at 12:00 A.M.

Microsoft sets 2006 timetable for next version of Windows

By Brier Dudley
Seattle Times technology reporter

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In a move to reassure major customers and software developers, Microsoft yesterday answered one of the big questions looming over the PC industry: When will it finish the next version of Windows?

The product, code-named Longhorn, will be "broadly available" in the second half of 2006 and a companion server system will be done in 2007.

To meet that schedule, Microsoft postponed one of the key advances in Longhorn, a sophisticated new system for storing and managing files called WinFS.

"We've had to make some trade-offs to deliver the features corporate customers, consumers and (computer makers) are asking for in a reasonable time frame," Jim Allchin, head of the Windows group, said in a prepared statement.

Longhorn is more than a new piece of software. As a foundation for tomorrow's PCs, Longhorn is expected to help determine whether the machines gain or lose importance in the next chapter of computing and Internet.

Longhorn is also important to Microsoft investors. Analysts expect the company's stock to idle along in its current trading range until the "Longhorn wave" of product releases begins.

Windows is also Microsoft's biggest product. In the fiscal year that ended June 30, the Windows client division had sales of $11.5 billion, nearly a third of the company's total $36.8 billion.

"Getting Longhorn to customers in 2006 will provide important advances in performance, security and reliability, and will help accelerate the creation of exciting new applications by developers across the industry," Bill Gates, chief software architect, said in a prepared statement.

The schedule was completed yesterday morning, announced to a group of product evangelists meeting at the Redmond campus and then disclosed with a news release, said Neil Charney, director of Windows product management.

Charney said the Windows team worked on the Longhorn schedule and priority list after it finished the update kit for Windows XP on Aug. 6.
 
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"It was the time for the team to start working through the schedule for Longhorn, the project, the targets, and coming up with a closer assessment of where we are and where we could target availability," he said.

Charney said it was also important for the company to provide more "predictability" to customers and developers writing software to run on Longhorn machines.

Analyst David Smith at the Gartner research company said Microsoft was trying to do too much with Longhorn and had to cut back to meet demands from customers, especially corporations that signed multiyear contracts and expected system upgrades before they expire.

Smith said the product coming out in 2006 is really an interim version of Windows, en route to a product with all of the promised Longhorn features.

"They can call it whatever they want, but if it doesn't have WinFS or some of the other features they were talking about for Longhorn, it isn't really Longhorn," he said.

Charney disagreed with that characterization. "In terms of what Longhorn will deliver at the end of the day, the announcements we're making today really don't change that vision at all," he said.

Although WinFS will not be done in time for Longhorn, the software will include other key features — a new graphics system called Avalon and a communications system called Indigo.

Microsoft also announced that Avalon and Indigo will be compatible with the current Windows XP and Windows Server 2003. That's a key bit of information for software developers and businesses that write custom software applications. Microsoft wants them to start using tools to produce software to run on Longhorn PCs, but developers want to write programs for the broadest possible range of computers.

The announcement had little effect yesterday on Microsoft stock, which closed up 2 cents at $27.46.

"I think most Wall Street folks had kind of felt 2006 was the time frame they were expecting," said Jonathan Geurkink, an analyst at Ragen MacKenzie in Seattle.

Longhorn's timing is unlikely to affect current PC sales, said Al Gillen, an analyst with the IDC research company.

"Customers tend to look at Microsoft's road map and they say, 'OK, they're going to bring out a product in '06 which means we're going to adopt (it) in '07 or '08,' " Gillen said. "I don't think anybody was holding back on deployments waiting for Longhorn technology."

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

Copyright © 2004 The Seattle Times Company

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