Microsoft has capped off its upgrade of Project 2007 with a comprehensive IT governance tool called Portfolio.

Portfolio is essentially Project for Project; it allows executives to prioritize myriad projects in an enterprise development cue through the use of a matrix that takes into account such factors as whether a project is mission critical or aligned with overall organizational goals, and cost.

"It helps people figure out how to do the right things from among the pipeline of all the stuff they need to do," William Lyon, senior product manager for Microsoft Office Project, told internetnews.com.

Tellingly, Portfolio will run on Sharepoint 2007, which is Microsoft's new platform for collaborative productivity tools.

The company has put a great deal of emphasis on collaboration, and has larded both Project and Portfolio with features that facilitate collaboration.

Microsoft acquired the technology for Portfolio when it bought portfolio management vendor UMT in December 2005.

"That's the fastest I've seen Microsoft integrate an acquisition into one of our own products," noted Lyon.

That urgency speaks to the importance which the Redmond, Wash.-based company places on Project.

Traditionally, Project has been used by project managers to outline the timeline for a particular project and its dependencies.

But Microsoft sees it as a potential collaborative hub, and has made the effort to connect it to other Microsoft Office tools like Excel and Outlook.

Microsoft has also added features intended to make the application useful to a wider set of users than its original constituency of project managers.

For instance, Project now provides a variety of views to suit the needs of different organizational roles.

Microsoft also allows Project to integrate more easily with other Office applications, as well as with non-Microsoft applications, such as ERP (define) systems from SAP and human resource software from Oracle.

"We recognize that our customers work in heterogeneous environments," Lyon said.

Thus, project managers can produce progress reports in Excel, and executives can use those reports to interact with data contained in Project.

"This goes to the question of where do we win? It's in the integration with tools that people use every day," noted Lyon.

Laura DiDio, who follows Microsoft for the Yankee Group, explained that Microsoft is trying to change perceptions about Office by showing that it is more than just a vendor of packaged applications.

Thus the emphasis on different views for different roles.

"They're trying to show they're being revolutionary and not just evolutionary with regards to changing roles inside the enterprise," she told internetnews.com.

The emphasis on roles also allows Microsoft to make its products relevant to a greater number of users, thus making an upgrade to Office 2007 more than just a pretty facelift.

"They're trying to sell their customers on Office not being just a packaged application. It supports very flexible ubiquitous connectivity," said DiDio.

That said, DiDio said that Microsoft will need to create incentives for its reseller channels.

IT budgets are being cut across the board and "it's going to take more convincing than it did 10 or 15 years ago," she said.