Microsoft held its annual meeting with financial analysts this week, discussing the current state of the company as well as its .NET ("Dot NET") future. Chairman Bill Gates said that its core products, Windows and Office, had record years, as did many of its other application, server, online and consumer products. But everything the company is doing today, Gates said, is just a prelude to its transition to .NET. "This will be a defining year for Microsoft and our industry," Gates said. "We launched our flagship product, Windows 2000, to rave reviews and solid customer adoption. We're on the eve of delivering an unparalleled range of the most scalable, highest-quality servers ever brought to market at one time by one company. And we've just outlined the .NET vision, which we believe will guide development for the next generation of the Internet. It's going to be an amazing millennium for the company."

Despite rumors that Windows 2000 isn't selling as well as the company had hoped, Gates and company tried to put a bright face on by focusing on "momentum for Windows 2000," including two new milestones: new SQL Server performance benchmarks and a deal with Lycos that will place Windows 2000 at the heart of Lycos' Internet hub. Lycos is one of the largest Internet sites on the planet, reaching over half of all Web users in the U.S. Microsoft is set to release an amazing array of Windows 2000-based server products over the next few months. Microsoft's Chris Atkinson says that SQL Server is on a financial tear, making over $1 billion each year.

But the biggest excitement, as usual, concerned upcoming technology, which is embodied by Microsoft's .NET initiative. The company demonstrated the next version of its Office productivity suite, code-named Office 10, which will feature a minor subset of .NET technology and some ease-of-use features. Also, an upcoming XML-based server application, code-named "Tahoe," will work with Office 2000 and Office 10 by simplifying their capabilities to collaborate, find, share, and publish information online. The Tahoe document management software will ship in early 2001, according to the company. And to facilitate the transition to .NET, Microsoft said that it will spend $4.4 billion on .NET-related research and development during the next fiscal year.

"Dot-NET is our platform," Gates said. "Everything that exists on Windows will exist here." In the meantime, however, the company has many new products to release. And two of the most eagerly anticipated are finally around the corner. Windows 2000 Service Pack 1 (SP1), originally due in June, will ship on August 1st, the company said. And Windows 2000 Datacenter Edition (Datacenter), also originally due in June, will ship August 11. And growth of Microsoft's existing desktop franchises isn't expected to match the torrid pace of the past. "I won't call our desktop business mature," Microsoft CEO Steve Ballmer said. "But it isn't going to grow 25 or 30 percent a year.