Microsoft eyes early 2008 release for Vista update

SEATTLE (Reuters) - Microsoft Corp. said on Wednesday it plans to release the first major update to its Windows Vista operating system early next year.

Many of Microsoft's large corporate customers wait for the release of the first "service pack" -- a software package of fixes, updates and improvements -- before implementing a new Windows operating system.

Corporate customers often hold back on adopting new software to allow Microsoft time to work out the kinks experienced by regular consumers who often buy a new computer with the latest operating system already preloaded.

In a post on the company's Web site, Microsoft said it plans to begin testing Windows Vista SP1 among a smaller audience in a few weeks and aims to ship the product to computer manufacturers in the first quarter of 2008.

Microsoft said the first service pack is not as significant as in the past, because the company can now send out patches and fixes to the product through online updates.

Windows Vista SP1 should, according to Microsoft, improve the operating system's security, reliability and performance, but it will not change the product's look or add any major features.

Microsoft also said it delayed the target date for when it will release its upcoming Windows Server 2008 to hardware manufacturers. The company now expects to release the product to manufacturers in the first quarter of 2008 from an earlier target of the end of 2007.

Redmond, Washington-based Microsoft said the delay should not affect its plan to launch Windows Server 2008 at the end of February.

The company also announced plans to release the third service pack of Windows XP, Vista's predecessor, in the next few weeks. It will be released to PC makers in the first half of 2008.

Shares of Microsoft were up 27 cents, or nearly one percent, to $28.20 in afternoon trade on Nasdaq.

(Reporting by Daisuke Wakabayashi)