Hutchinson: "We certainly are focused on the product. We're less focused on Windows and Office together and more focused on putting out a great Office product. No real specifics to share of those two things in terms of their ship dates."

Meanwhile, Office 2007 continues to sell like hotcakes.

According to Amazon, Office Home and Student 2007 was the most purchased software in 2008, he said, adding, "NPD just told us we were the No. 1 selling U.S. retail software product for the second year in a row."

But the software faces threats in the shape of Google's Docs and Spreadsheets, among others. Today, Google announced plans to begin allowing resellers -- third-party software and service vendors -- to sell a subscription version of the Web-based productivity software aimed at businesses, beginning at the end of March. Until now, Google has mostly sold its "Apps" suite directly to customers via the Web. Third-party resellers, who customize and support software, are a major part of Microsoft's sales strategy. The company has more than 640,000 partners in various categories around the world and says 95 percent of its revenues flow through this "virtual sales force."

In October, Microsoft announced plans to offer Web-based versions of its popular Office products. I got a glimpse of the Office Web applications last week.

Microsoft currently offers Office Live Workspace, a free, Web-based document storage and sharing service.

In a demonstration, Michael Schultz, product management and marketing manager for Office Live, saved a Word document on Workspace and Hutchinson opened and edited it in a stripped-down Web version of Word running inside Apple's Safari Web browser.

It was just an early technical preview, but the in-browser editing -- including some text formatting and styles, table layout tools and more -- ran smoothly in the demo I saw. The Web application had the "ribbon" user interface, very similar to Office 2007 and other applications coming in Windows 7.

So what's the time line for the Office Web applications?

Hutchinson said Microsoft will have more to disclose in the next 12 months. The company is planning a public test version of Office Web apps in 2009.

And what of the business model? Google gives consumers access to its Web-based apps for free, monetizing them with advertising.

"I think for right now, one of the things that we are passionate about is to get people to experience it and use it," said Schultz. "That's why we are providing the services component for free. That will be continue to be free to end users. How we monetize may change over time."

Some portions of existing Office Live offerings, such as Office Live Small Business -- free Web sites -- are ad-funded.

Office also does extremely well on the Mac. Is Microsoft planning an Office iPhone application in the future?

Schultz said Microsoft will continue to listen to customers and give them what they want. "In terms of the way that we're opening up the Office Web applications to a Safari browser on the Mac is a good indication that we care about how people are working across devices, across browsers," he said.