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Microsoft's Feature-Cutting Strategy For R2, Longhorn Raises Concern: Page 3 of 5

The Windows Server 2003 Service Pack 1--which was due to ship by the end of 2004--has been delayed for release into 2005. In December, Microsoft also said its Exchange Edge Services promised for 2005 won't make it in time and will likely end up in a later, full upgrade to Exchange Server 2003.

Microsoft has not rushed anything out to market yet, but its recent decisions to cut features out of Longhorn and Windows Server R2 could cause concern if those features are significant to customers, said Paul DeGroot, a vice president at Directions on Microsoft, a research firm.

"The limits of that approach are sinking in in the form of skeptical customers who don't intend to be fooled a second time. We see customers who are being much more hard-nosed about Microsoft's annuity program and want to know what they'll get for the money they spend," said DeGroot. "Getting a product, any product, out to meet an upgrade deadline would be a very short-sighted strategy and would probably add to Microsoft's grief."

Partners maintain that Microsoft's decisions to change the planned feature sets of R2 and Longhorn upgrades are disappointing, but not deal-breakers.

"I haven't heard anything directly from customers, but I know it's an issue out there," said one executive at a large account reseller who wished not to be identified. "There's no doubt there's pressure on Microsoft to deliver new functionality in that three-year time frame, but we rarely see any company that doesn't have a major rev of the Windows server within three years."