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September 14, 2005 10:02 pm

Microsoft overhauls development strategy

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Microsoft has overhauled its core software development practices to avoid any repetition of the delays that have bedevilled the next planned version of Windows, according to Steve Ballmer, the company's chief executive.

The changes, along with plans to release more frequent, less ambitious versions of the widely used software, mark a significant shift in Microsoft's approach following one of the most troubled new product cycles in its 30-year history.

“We attempted something that was beyond the planning and conceptualisation of the system,” Mr Ballmer said of Windows Vista, the much-delayed version of the software that is now planned for late next year.

“The product cycle has been longer than it should have been,” he told the FT.In terms of significant new innovation between releases, it's been a long wait.”

Those delays are set to end late next year with the simultaneous launch of new versions of Windows and the Office suite of PC applications in the company's most significant new product cycle since Windows 95.

The new versions of the company's key PC software are likely to rekindle higher growth after a period that saw its growth rate slip below 10 per cent for the first time last year, according to Wall Street analysts.

Mr Ballmer's comments are the most public sign yet of the dent to Microsoft's confidence in its core development process that resulted from the Vista delays.

Accustomed to building ever more elaborate versions of its operating system with each new release, Microsoft's ambitions finally reached a point where they overwhelmed the capacity of its internal planning processes. “In the last year and a half we've done a lot of revamping of the engineering and the processes,” he added. We want a lot of innovation – we have made changes.”

While Mr Ballmer did not give details of the changes, other Executives have talked of taking a more “modular” approach to Microsoft's biggest products, breaking them down into smaller elements that can be worked on independently. before being “bolted together”.

Another result of the Windows Vista delays was that Microsoft was likely in future to issue new versions of its software more frequently, with each one representing fewer big changes, according to Mr Ballmer.

The rise of Google, which releases frequent updates of its software, has added to the urgency for Microsoft to do the same, though the company's executives have largely discounted the threat from Google to its core business.

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