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Windows 2000 at "core" of Microsoft strategy

Microsoft will overhaul virtually its entire corporate software strategy starting with the Windows 2000 operating system, the company's new chief financial officer says, and everything is on the line.

SAN FRANCISCO--Microsoft will overhaul virtually its entire corporate software strategy starting with the Windows 2000 operating system, the company's new chief financial officer said today, and everything is on the line.

"Windows 2000 is a bet-the-ranch product for Microsoft," CFO John Connors told attendees at the Banc of America Securities conference here. "It is the fundamental core of our programming effort for the next several years."

Making his first appearance as CFO at an investor's conference since being appointed last month, Connors reiterated Microsoft's plans in a variety of markets for the next several years. While Connors didn't break from the company line with his speech, he showed a grasp of the issues facing the company and a sense of humor about some of Microsoft's ventures.

"We've been investing heavily in our Internet properties, and we've probably had losses up there with the best of them," he said explaining the company's content ventures.

The next big event for Microsoft will come with the release of the much-delayed Windows 2000, which will happen Feb. 17 at a gala launch event, Connors said. The big test for the new OS will come in reliability. Simply put, it can't be prone to crashing.

Following that, Microsoft will then go on a two-year spree in which all of its back-end corporate software will be overhauled to dovetail with the new OS.

A number of new applications, including new versions of SQL Server and other servers that are part of the company's BackOffice software product line, will come out as well to tackle emerging elements of the market. Microsoft, for instance, will come out with software for managing Web sites and server farms.

"If you talk to 'dot.coms' today the single biggest challenge is in managing the servers," Connors said.

Additionally, in May, the company will unveil its Next Generation Windows Services, a software system designed to expand Microsoft OSes into Web phones, pads, auto PCs and other devices without mangling or drastically rearranging Web pages.

"It's all about a new programming approach for millions of devices," he said.

Unlike previous OSes, Windows services will be more like a cross between software and a collection of services, he said. Chairman Bill Gates is heading up the effort.

Like most other executives at the conference, Connors predicted that the PC market would continue to grow. Nonetheless, the most exciting markets in the future will involve wireless communications, devices and back-end servers. Wireless communications are growing as the Internet is merging with the explosive popularity of the cell phones. Server demand, meanwhile, comes because the infrastructure doesn't exist to carry the traffic that is expected over the next few years.

Echoing Connors, National Semiconductor's CEO an hour later told attendees: "There are three areas of growth: wireless, information access devices and server and server farms. There will be an infinite demand for servers."

Still, dull as it seems, Connors said that the market for desktops will remain a fundamental part of the picture. "We expect it to continue to grow in double digits," he said.