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Microsoft Delays Office Release to Work Out Lingering Bugs

Microsoft on Thursday said it would delay its latest Office suite of software programs. The announcement could be the precursor to further delays of its Windows Vista operating system.

Microsoft said it needed to improve the product’s performance and design in the wake of feedback from business users testing the beta version of the suite, which includes Word, Excel and PowerPoint software.

Office 2007 for businesses was scheduled for release in October. Microsoft now reports its word processing, spreadsheet and presentation suite’s introduction will be pushed back to the end of the year. The consumer version will still be available in January.

Another Stalled Start

Microsoft had appeared to be getting closer to releasing its operating system and server products. The company unveiled beta 2 versions of Windows Vista, Windows Server “Longhorn” and the 2007 Microsoft Office system at Windows Hardware Engineering Conference (WinHEC) in May.

It is the first time that Microsoft simultaneously released the test versions of all three of the company’s flagship products.

At that time, Microsoft said it was on target to debut Office 2007 at the end of the year as planned. Beta testing of the Office suite, though, led the software giant to revise its development schedule. The company said feedback on quality and performance will ultimately determine the exact release date.

“Office has been in pretty good shape for a while now. There is nothing going on with it, other than compatibility work. Office has adjusted its delivery schedule to better match Vista,” Enderle Group Principal Analyst Rob Enderle told TechNewsWorld.

“People are not going to get too worked up if Office slipped a month and rolled out a month behind Vista, but people are unlikely to buy a new copy of Office unless Vista rolls out.”

The Ripple Effect

Analysts agree that Vista’s delay could have a direct impact on Office 2007 sales as customers may wait to invest in the new suite until the new operating system is finally released. Now some analysts speculate that Office 2007’s delay could push back the shop date for Vista.

“We believe that the Office delay somewhat increases the likelihood for a Windows Vista launch delay, due to plans for a coordinated launch campaign with Office 2007,” Israel Hernandez, an analyst with Lehman Brothers, wrote in a research note.

Hernandez expects Microsoft to take a US$125 million to $175 million impact on its second quarter revenue because of the Office delay. However, he also expects that revenue to be captured in the following quarters.

Chiming In

Office, he added, is more dependent on Windows than Windows is on Office. Vista is likely to launch by the end of the first quarter of 2007 for consumers, according to Hernandez.

“Microsoft will likely continue to shoot for a joint release of Office and Vista, so we expect to hear that Vista will also be pushed back to late 2006 for volume [business customers] and late [in the first quarter of 2007] or possibly into Q2 ’07 for the consumer,” Citigroup analysts said in a research note.

“The risk is that these persistent delays could indicate quality issues that may dissuade enterprises and consumers from becoming early adopters.”

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