Microsoft is slowing down development work on a new family of its business applications - known as "Project Green" - and is instead focusing on the products it currently sells.

Because the first products now won't be out until 2008 at the earliest, the number of developers assigned to Project Green is being reduced from 200 to 70, Microsoft Senior Vice President Doug Burgum said Wednesday. Microsoft originally had planned to ship the first results of Project Green as early as late 2004.

"We have made a decision to move resources off Green and back on the core product lines to strengthen those product lines because we realize now that it is going to take much longer," Burgum told a federal court in testimony in the U.S. Department of Justice's case to block Oracle's takeover of PeopleSoft.

With Project Green, Microsoft aims to solve what Burgum called its "embarrassment of riches" - the company's four overlapping sets of business applications that it gained by purchasing Great Plains Software of Fargo, N.D., in 2000 and Navision of Vedbaek, Denmark, in 2002. The applications cover management of finance, human resources, customer relationship and other business tasks.

Microsoft plans to build completely new business applications on a single code base that will eventually replace its existing offerings. The new products will depend on the delayed "Longhorn" versions of Microsoft's client and server operating systems. The Longhorn client is expected to ship in 2006 and the server version in 2007.

The decision to reassign developers off Project Green is a reversal in strategy. Microsoft Business Solutions executives last year said the company planned to have two-thirds of its developers working on the new products by mid-2004, with one-third focused existing products. Microsoft Business Solutions has about 1,200 developers worldwide, Burgum said.

The process of reassigning developers is currently underway, Microsoft spokeswoman Janelle Poole said Thursday. Poole could not say when Microsoft made the decision to scale down work on Project Green, but did say development will begin in earnest after the Longhorn client is released.

Microsoft Business Solutions, headed by Burgum, although still loss-making, is a key part of Microsoft's strategy for growth as it looks beyond its maturing Windows and Office franchises.

The IDG News Service is a Network World affiliate.