The new Windows Core division will be headed by Brian Valentine, according to a source familiar with the company's plans. Valentine currently serves as senior vice president of the existing Windows unit.
The move to have a unit dedicated more exclusively to development work comes as Microsoft is ramping up efforts around, the next major version of Windows, which is expected to be released in late 2005 or 2006. Other software makers, including Oracle, have set up units focused on core technology in the past, leaving the work of creating specific products to separate teams.
Such a move would more narrowly focus Valentine's responsibilities, one analyst said.
"He's a very inspiring leader, and I think he really motivates the technical teams," said Rob Helm, an analyst with Directions on Microsoft, an independent market research firm.
A Microsoft representative declined comment. The company is expected to announce the reorganization later on Monday.
The reorganization would more clearly separate Microsoft's product units from those developing the core operating system. While much of the company's development efforts focus on new versions of the operating system, those that run the company's software are often working with products that are one or two versions old.
For example, a study released last week found that only 6.6 percent of businesses are running the up-to-date Windows XP issue of the operating system. Half of businesses are on the relatively modern Windows 2000, but more than a quarter are, products that are at or nearing end-of-life status from a support perspective.
Longhorn is seen as afor Microsoft. The company plans to offer both server and desktop operating systems based on the new technology and will also tie the release of a new version of Office and several pieces of server software to the arrival of Longhorn.
Analysts have cautioned that such a strategy could leave the company vulnerable if the core Longhorn technology takes longer than expected to arrive. Microsoft, which earlier said thatin 2005, now refuses to say when it will be released, typically stating that the operating system will ship when it is ready.
Longhorn consists of several new components, including aknown as WinFS, a graphics engine dubbed Avalon, and Indigo, a new communications subsystem. It will also feature a new user interface, dubbed Aero.
In addition to his role within the Windows unit, Valentine was an early advocate for the company's Trustworthy Computing initiative, Helm said. That effort, aimed at making the company's code more secure, has taken on heightened importance amid several prominent threats this year, including MSBlast and SoBig.
Microsoft has said repeatedly in recent months that security is its top priority, but the software giant still faces criticism that it has not done enough to shore up its products. The company has responded by changing some of the settings within current versions of Windows and offering promises that future software will be designed to be more secure than current products.