Bill Gates put on his chief software architect hat Friday to tout and demo a new development platform that Microsoft will release later this year for creating custom applications atop the Redmond, Wash.-based software maker's Office System.

In a 45-minute presentation at the Office System Developer Conference -- the first such meeting specifically targeting Office -- Gates summarized not only the technologies, but also the reasoning that went into pushing Office as a development environment.

"By making improvements in Office, we can free up parts of [customers'] IT budgets and shift them to new projects that leverage Office," said Gates.

The bulk of Gates' keynote, however, was taken with two live demos of using Visual Studio 2005 Tools for Microsoft Office (VSTO), which is slated for release later this year.

In one demo, KD Hallman, the general manager for the product, built a custom application that sat atop an Excel spreadsheet, pulled data from the Access database, and culled photos from a Web service. The speed of her work was due, she said, to the tight integration between the actual Office application used as the custom app's foundation -- in Hallman's example, the Excel spreadsheet -- and the Visual Studio development tools. Controls and other objects can be dragged and dropped between them to assemble the app.

"In about 10 minutes I built a distributed application atop Excel," said Hallman as she wrapped up.

In another demo, VSTO 2005 was used to create a customer relationship management application for an in-the-field sales force atop Outlook, Microsoft's e-mail client. Among the tricks displayed was one where e-mail messages representing new leads were returned to the back-office system for later attention.

VSTO 2005, which will replace the current VSTO 2003, allows developers to bring Office into Microsoft's .Net Framework development environment, and pays off immediately in saved time while coding, Microsoft's executives said.

"In VSTO 2003, if a developer wanted to display the action pane inside a Microsoft Word or Excel document, it would require about 600 lines of code," said Hallman. "In VSTO 2005, it takes one line of code. This is an extreme example, but it's not atypical."

Gates' speech, the demos, and the introduction of VSTO 2005 are all part of Microsoft's efforts to spur the adoption of Office 2003, which in the company's strategy, plays a crucial part in getting XML-formatted data into end users' hands.

More needs to be done, though. "We're doing better at bringing these pieces together, but I see us less than a third of the way to Office's [intended destination]," said Gates.

While none of the Microsoft executives got specific, Gates hinted at areas where he thinks Office is weak, particularly SharePoint, the Web portal and sharing services that tie with Office.

"SharePoint is under-utilized in Office," said Gates. "But the next version will bring SharePoint to light in an even stronger way."

VSTO 2005 has been in beta since last summer; Gates said that the next preview -- Beta 2 -- will release next month.