It should come as no surprise, really, as Microsoft is known for serially delaying new products. Furthermore, with the Vista operating system delayed, what was Office 2007 supposed to run on anyway?
For the record, we feel about Office as we feel about Vista: Microsoft needs to get them right so delays are better than half-baked products. However, longer-term it will be crucial for Microsoft to get more effecient use of its R&D budget. It needs to release reasonably significant upgrades on an ongoing basis rather than having huge overhauls every 4-5 years. In short, it needs to get smaller because that is the most likely way to get more nimble.
MSFT 1-yr chart: