Microsoft is creating a new central engineering division that will work on the core of the Windows OS.

The Windows Core Operating System Division (COSD), within the company's Platforms Group, will be responsible for the core OS platform, including development, program management and testing.

The announcement comes as thousands of developers at Microsoft are working on the next version of Windows, codenamed Longhorn, which most industry watchers expect to be released in 2006. Microsoft chairman Bill Gates has called Longhorn the biggest Microsoft release of the decade and bigger than Windows 95.

The newly formed division, described by Microsoft as a "center of gravity for advancing engineering excellence within Windows," will report to senior vice president Brian Valentine, the Redmond, Washington, company said.

To a certain extent, Microsoft's decision to form a division focused on the OS core was driven by its main rival, Linux, said Rob Enderle, principal analyst at Enderle Group, a consulting firm specialising on emerging technologies.

"They have been studying Linux extensively. Part of their study has been on how Linux has been able to maintain a high level of consistency in the kernel while groups around it maintain maximum flexibility," Enderle said.

By closely controlling the OS core, Microsoft will be able to better ensure that Longhorn will arrive on time and meet its quality and security objectives, Enderle said. He expects Longhorn to come out in the fourth quarter of 2005, provided that a beta becomes available as planned in 2004.