Microsoft has also rebuilt Project Server in an attempt to improve its performance, make it friendlier to third-party developers and integrate it with Office 2007's collaboration features. When Project Server was introduced in 2002, its capabilities were so limited it was a mere "toy," Dahlgren said. The 2003 update fixed some issues, but the software continued to run slowly.

With the new release, "Microsoft appears to have addressed Project Server's performance issues, though the proof will be when large deployments emerge," said IDC analyst Melinda Ballou.

Project Server 2007 also includes a new .Net application programming interface that provides full Web services connectivity for developers, who can then more easily create third-party applications on top of the Microsoft software, said Gary Chefetz, CEO of MSProjectExperts, a New York-based consulting firm.

Microsoft also released a new Project Portfolio Server 2007 application based on technology it acquired early last year. That product is designed to compete against higher-end offerings from Hewlett-Packard Co., CA Inc. and other vendors, Ballou said.

Mercedes-Benz USA has used Project and Project Server 2003 to help it accelerate the introduction of new cars in the U.S., according to Simon Huang, a technology planning support specialist at the Montvale, N.J.-based company.