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No Office 14 until 2010, 'Netbook' Server Planned

james

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Microsoft will not release its next-generation Office 14 suite in 2009, Microsoft chief executive Steve Ballmer confirmed during a Tuesday "strategy update" Webcast. A "netbook"-like version of Windows Server is also planned.

Ballmer offered a midquarter update to Wall Street analysts, focusing primarily on the impact of the economy on the company's business. Microsoft is using RCA as a model, Ballmer said; RCA continued to invest during the Depression, then went on to dominate the television industry.

"And that's kind of the mindset that we have relative to the economic situation," Ballmer said. "You don't beat it, you manage in this environment; you don't think about it as a short term, you think of it as a reset that may take several years."

Ballmer said that he was still interested in talking to Yahoo about some sort of a search partnership, and with the company's new chief executive, Carol Bartz. Ballmer expressed a desire to not end up like the company's former chief executive, Jerry Yang, apparently implying he was ineffective.

Ballmer offered little explanation or context for the Office 14 delay, although he did say that the free OpenOffice suite had caused the company to lower the worldwide price of the suite. Both Microsoft Office and Microsoft Windows are heavily pirated; in fact, Ballmer named both pirated versions as key competitors.

Ballmer's disclosure of the delay was actually made in passing.

"From a strategy perspective, the next big innovation milestone is Office 14, our next Office release, which will not be this year, there's a version of Sharepoint, there's a version of Exchange, there's a new version of Office Live," Ballmer said.

A Microsoft spokeswoman confirmed the delay, but declined to offer further details. "We can confirm, as Steve Ballmer shared this morning during his meeting with financial analysts, that the next version of Office will be available next year," she wrote in an email. "We have nothing additional to share at this point."

Office 14 is the successor to Windows Office 12, also known as Microsoft Office 2007. The market originally expected Office 14 in the first half 2009. However, Microsoft also released the two versions of Windows Vista and Office 12 within a few weeks of one another, a strategy that some have speculated Microsoft hopes to repeat.

Ballmer also confirmed that Microsoft will make available a low-cost version of Windows Server, to take advantage of OEMs that want to design cheap or "netbook"-like hardware. That software will apparently be the Windows Server Foundation Edition.

"From a revenue perspective, we are introducing a new low-cost, low-price, low-functionality Windows Server SKU," Ballmer added. "If you take a look at it, as server prices, hardware prices have come down, we don't have exactly a netbook phenomenon but if somebody can buy a $500 server they're a little low to spend $500 for the server operating system that comes with it. So we have something akin to a netbook at the server level and we will be introducing our Foundation Edition over the next month or two."

Ballmer also reiterated that Microsoft did not have plans to make its own phones. "Windows and Windows Mobile will become closer," he said, although there still will be a distinction between Windows and phones.

But as some have speculated, Ballmer said that Microsoft expects Google to be a direct competitor. "I assume we're going to see Android-based, Linux-based laptops in addition to phones," Ballmer said. "We'll see Google more of a competitor in the operating system more than we have ever seen before."

Microsoft has also lost market share in the browser space, something that the company hopes to fix with the release of Internet Explorer 8, Ballmer said.

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