The updated NAS offering will be more competitive with higher-end offerings from storage leaders such as EMC Corp. and Network Appliance Inc., Lorenson said.

Lorenson wouldn't say when the enterprise NAS upgrade will ship.

Brian Garrett, an analyst at Enterprise Strategy Group Inc. in Milford, Mass., said that although Microsoft's low-end product has been quite successful, the company will have a much harder time breaking into the high end, long dominated by vendors such as EMC and NetApp.

In a recently published report on Microsoft's NAS and iSCSI products, Tony Asaro, another analyst at Enterprise Strategy Group, recommended that companies running mostly Windows-based systems with "some mix of Linux/Unix" should look closely at the Microsoft offerings when evaluating NAS systems.