The recent profit warning announcement by Microsoft last week highlights that the sales of Office 2000 have not taken off as they they had expected. This could be a result of the slower-than-anticipated adoption of Windows 2000.

Microsoft had predicted at the beginning of the year before Windows 2000 was launched that 15% to 20% of Windows 95, 98 and Windows NT desktops would be converted to Windows 2000 by the end of this year, however a conversion rate is anticipated at around less than 10%.

This must have had a roll-on effect to Microsoft Office, also people do not tend to purchase newer versions of Office, only when they tend to upgrade hardware or operating systems.

Analysts forecast that there will be a continued slow Windows 2000 adoption through 2001 and many people have been put off as the upgrade to Windows 2000 has proven more difficult than many people thought it would be. An Analyst also envisaged that one in four companies would face serious problems switching to Windows 2000 through 2003.

Another reason stated is due to the fact that PC sales collapsed in the US and that the timing of the launch of Windows 2000 may have benefitted from having been released later on in the year.

Microsoft's later version of Office 2000, codenamed Office 10 is still in testing and is expected to be shipped around mid-2001, this again may not attract more people to upgrade as Microsoft had anticipated. Some of the original features Microsoft had originally included in Office 10, such as Office Designer Tool and Local Web Storage System have now been placed with Microsoft's .Net initiative, thus taking away some of the attraction for people to upgrade to Office 10.