updated 10/21/2004 9:34:49 AM ET 2004-10-21T13:34:49

Microsoft Corp.'s chief executive believes it's naive to suggest the software giant can eliminate all security vulnerabilities in its various products even though engineers are trying hard to do so.

Hackers get smarter, too, Steve Ballmer told several thousand information-technology workers at the Gartner Symposium ITXPO.

But Ballmer said engineers were making progress, such as adding security enhancements to Windows Server 2003 when its next big update, Service Pack 1, comes out.

"I think we've learned a lot more about security basically than anyone else in the world," he said.  "That's kind of the good news and bad news, being the position we've been in with our kind of market share."

Microsoft's operating systems run on more than 90 percent of the world's personal computers.  Even if Microsoft can make its products completely invulnerable, customers wouldn't upgrade all their systems, Ballmer said.

(Microsoft and NBC are partners in MSNBC.)

Ballmer also explained Microsoft's decision to drop an advanced file storage system from the 2006 release of its next generation of Windows, code-named Longhorn.  The new file system, called WinFS, would allow a single search to find anything on a computer.

"It's making good progress but not good enough progress to make an '06 shipment," Ballmer said. "We thought we needed to get clarity, internally and externally, in terms of what we would be able to ship and when."

Last week, Google released its version of software that scours computers for information. WinFS will be included in later versions of Longhorn.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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