Chairman Bill Gates said Monday that the line continues to blur between Office-like tools and programs that house businesses’ more formalized, or structured, data.

“Applications are changing in their architecture,” Gates said, speaking at the Convergence 2006 trade show here.

Gates said that much of the work in Microsoft’s Business Solutions unit consists of helping workers more easily traverse the boundary with other software, as well as connect to Internet-based data. “We’re taking the best elements of the online world, where we are seeing mashups,” he said. Mashups are hybrid software that combine content from more than source, such as real-time traffic reports and a map, and present them in a Web site.

There will be a mix of customers: Some will choose to run the software on their own servers, and others will prefer to subscribe to a hosted service, Gates said. Microsoft will cater to both, he said.

During Gates’ keynote speech, Microsoft showed a demo of an upcoming Dynamics product that both takes some interface cues from Office and Windows Vista, and links more tightly with those programs than has been the case.

Darren Laybourn, a general manager in Microsoft’s Dynamics unit, showed software that used a ribbon of contextually changing menu options, a la Office 2007. The application also grouped related information into stacks–a technique employed by the new search capabilities in Windows Vista.

“We’re trying to create a familiar experience” Laybourn said. He also demonstrated the single-click exporting of reports and other data to Microsoft Word.

On Sunday, Microsoft largely reaffirmed the road map it presented at last year’s show for the different Dynamics programs. Each of Microsoft’s enterprise resource planning programs–Axapta, Great Plains, Navision and Solomon–will be upgraded over the next calendar year. A second wave of upgrades will run from 2008 to 2009. Microsoft unified all of the products under the Dynamics brand last year, renaming them with initials to signify the programs’ differing heritage.

The Dynamics AX 4.0 release is due in June, followed by Dynamics GP 10.0 and Dynamics SL 7.0 in the second half of this year. Dynamics NAV 5.0 is set for release in the first quarter of 2007, while an update to Microsoft’s CRM product is due in the first half of next year.

Gates noted that Microsoft on Monday released its BizTalk Server 2006 to manufacturing. The product promises to help companies manage their business processes across different software programs. The company had the formal launch for the product last year, along with SQL Server 2005 and Visual Studio 2005, even though BizTalk was still in beta testing.