The press conference, which was also spearheaded by Rich Tong, Microsoft's VP of marketing for the personal and business systems group, focused primarily on the enhancements to Exchange Server but also touched upon the company's wider Exchange enterprise strategy.
Gates and Tong also announced beta dates for Windows 98 and Windows NT 5.0. Windows 98 Beta 3 will be available "by the end of the calendar year," while NT 5.0 Beta 2 is due in the "first half of 1998," they said.
Microsoft officials have previously said they planned to ship NT 5.0 in the second half of 1998.
Enhancements to Exchange Server 5.5 include an unlimited message store, backup performance improvements, as well as support for additional Internet protocols and development tools. Version 5.5 will have the same pricing structure as Version 5.0, officials said.
Exchange Server has reported sales of more than 7.2 million seats, they said.
Pricing information and a 120-day trial version of Exchange 5.5 are available on the firm's Web site.
Responding to questions after the presentation, Gates several times referred to Exchange's principal opposition, Lotus Development Corp.'s Notes/Domino, as the only other competitor in a "two-horse race."
"The only place we are playing catch-up is in some simple groupware development," Gates said. "That is the strength that Notes has had."
Gates also said Hydra, the multiuser version of NT, would be the answer to the touted thin client market.
"There are a number of vendors that have promoted thin clients, but they are flawed in that they are incompatible with PCs and their approach requires the use of a browser to run locally," Gates said. "Any machine that can run a browser is not thin. The browser has to be the thickest application man has ever invented, and it's getting thicker faster than anything every development by man."
Hydra, which enables heavyweight applications to be run on thin clients, will allow users to have the "local computing power to run a lot of applications ... but move the execution to the back end," Gates said.
"Where you have seen terminals, those will be replaced by Hydra clients," he said.
Announced in May, the Terminal Server Hydra is jointly developed by Microsoft and Citrix Systems Inc.
Additional reporting by Mike Moeller