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Ballmer: High-end Windows, Office coming

Microsoft's CEO tells analysts that higher-priced versions of its core products are on tap.

REDMOND, Wash.--Microsoft CEO Steve Ballmer told analysts Thursday that Microsoft is planning new, higher-priced versions of both Windows and Office in the coming years as part of its effort to grow sales.

Ballmer said that the company will add both high-end desktop editions and new server options in the next versions of Windows and Office.

Microsoft's chief executive made his comments at a company-sponsored financial analyst conference here.

Ballmer noted that the existing premium Windows XP Professional version had added billions of dollars of extra revenue for Microsoft. "We have plans in the Vista generation to introduce an Enterprise edition," Ballmer said in a speech kicking off the Microsoft Financial Analyst Meeting.

Ballmer also said that Microsoft is planning a higher-end Office Premium version with Office 12 as well as an Office Server that carries with it an additional fee for each computer that accesses the productivity software.

Ballmer didn't specify what features will go into Office Premium or Windows Vista Enterprise Edition. The company launched the first test versions of Windows Vista and a corresponding server version of the operating system on Wednesday.

Other Microsoft executives also declined to offer more details on the premium versions of Office and Windows.

"We haven't finalized details about what we might do," group vice president Jeff Raikes said, referring to what might go into a premium version of Office. He did reiterate that the company plans a number of server-based products, but declined to specify those as well.

"We have servers people haven't even written rumors about," he said.

The other part of Microsoft's growth strategy, Ballmer said, rests in its expansion into other areas, such as software for cell phones, game consoles and interactive television.

Ballmer noted that hundreds of millions of cell phones are sold each year, but that Microsoft's software today only runs on dozens of millions of cell phones.

"Some people may think we are standing still, but we are not," he said.

The CEO also focused a good deal of attention on the company's competition with Internet leaders such as Yahoo and Google.

"We have won on the desktop," Ballmer said. "Now we really are going to win on the Web."

Ballmer said the Web will be the No. 1 place to advertise, noting that there will eventually only be a handful of major places to advertise on the Internet. "You can rest assured this company will be one of them."

He also noted that the company has "dialed up the pace of acquisitions" in recent months.

"We are unlikely to do blockbuster acquisitions," he added. "We are not closed-minded to it, but they are less likely."

Ballmer also talked about opportunities to grow the Windows business by cutting down on piracy and heading into the few outposts, such as technical computing, in which the OS has yet to make significant inroads.

Earlier this week, Microsoft made mandatory a program that requires users to verify their Windows copy is genuine before downloading patches and add-ons.

As for high-performance computing, Ballmer said that is "mostly a Linux world today," but the company has added staff in that area and is working on a version of Windows for that market. He also said the company can grow its share of the server market by targeting specific areas, such as Web servers.

Bob Muglia, Microsoft's senior vice president in charge of Windows Server development, told CNET News.com last month that the company plans to introduce a re-architected edition of its Internet Information Services Web server as part of a Windows Server revamp in 2007.