"Quality is key," Gates said, speaking here to about 1,200 executives who attended Dell Computer Corp's `DirectConnect' conference for its customers and the media.

Windows 2000 is intended as the successor to Windows NT, Microsoft's operating system for high-powered computers and corporate networks.

It is expected to be Microsoft's flagship product, but it has been plagued by delays. A December launch would put it about 18 months behind schedule.Gates and his fellow technology mogul--Dell Chief Executive Michael Dell--spent much of the initial session of Dell Computer's two-day conference here stressing the importance of the Internet in corporate America.

They warned the executives in attendance that the Internet will be used either by them oragainst them as it grows in popularity.

The Internet "is like a weapon sitting on a table, ready to be picked up either by you or your competitors," Dell said. Both he and Gates then eagerly demonstrated their companies' respective hardware and software products designed to make computer use and Internet commerce easier and more pervasive.

Among other things, Dell unveiled what the company is calling the "Dell OpenManage Resolution Assistant," which will be available on Dell PowerEdge servers. Users of the system can allow Dell technicians access to their computers over the Internet, enabling the technicians to diagnose and correct problems from elsewhere.

Dell expects to unveil a similar system for some of its consumer products this fall. Eventually, the company expects to provide such automated support across all of its product lines.

"This is the beginning of what we call self-healing systems," Dell said.Dell also predicted that the distinction between "dot-com" companies and traditional businesswill become insignificant in coming years. "We believe that the Internet will be your business," he said.

Citing his own company as an example, he said firms that use the Internet can reduce transaction costs and speed up time-to-market for products. Dell provides its corporate customers and suppliers with access to inventory information online.

Dell has a system it calls "valuechain.dell.com" that provides suppliers with secure access to its inventory data, giving them "a direct view into the manufacturing process," Dell said. Such systems brings "a dramatic reduction in the cost of transactions and the costs of interactions" between businesses, he said.

Gates, speaking after Dell, stuck mostly to themes detailed in his book, "Business @ the Speed of Thought." In the book, Gates outlines how corporations must learn to use technology to reap maximum value from the information they generate.

Gates also said Microsoft has increased its software research-and-development budget by 25 per cent for thisfiscal year, to $3.8 billion.

He said the money will be spent developing Windows products specifically for the Web, as well as developing new computer interfaces, such as voice-recognition software and handwriting-recognition software.

Responding to an audience question, Gates said he thinks the biggest threat to his company's preeminence has to do with maintaining its competitive edge."The problem of success is making sure people [within Microsoft] maintain that innovation," Mr. Gates said. "You don't let somebody come along like we did and change the rules of the game."