Microsoft says it plans to spend nearly US$7 billion on research and development in the current fiscal year and will add as many as 5,000 jobs, including at least 3,000 in the United States, as it pushes toward what it sees as a bright future for software despite the tech downturn.
“We believe that we’re just at the beginning of what we can do with software,” chairman and chief software architect Bill Gates said during a day-long analysts’ meeting.
“If we take any of the different audiences — we address the IT audience, the developer audience, the knowledge worker audience, the way business processes are done, the way people deal with information at home — in every one of those cases, we’ve really just scratched the surface in terms of the scenarios that software can enable.”
New and Improved
While making it clear that it would seek to remain the gold standard for traditional computing platforms, Microsoft also used the conference to highlight its focus on new devices, from Internet-enabled watches to advanced mobile phone software and Tablet PC platforms that can draw information from several sources.
Earlier in the week, the software giant announced that two of the biggest cable companies in the United States plan to test-drive its set-top box software.
“Microsoft is doubling back to what made it the dominant company in operating systems,” Forrester Research analyst Rob Enderle told the E-Commerce Times. “If it makes the best products, it will be the company that people choose.”
Show and Tell
Gates used his time at the meeting to demonstrate some of the improved functionality coming to the Tablet, such as the ability to share personal calendars with family members or friends via Microsoft’s MSN online service.
Other news at the conference came from Eric Rudder, who oversees the company’s server and developer tools business. He said Microsoft is poised to ship a Small Business Server version of Windows Server 2003 by year’s end.
Money and Jobs
Microsoft also said it will increase its R&D budget by 8 percent, boosting spending to $6.8 billion. Of the new employees, between 3,000 and 3,500 will be added in the United States, an announcement likely to help soothe the fears of unions in Microsoft’s hometown of Redmond, Washington, that the software giant was looking to ship significant numbers of jobs overseas.
The enhanced R&D effort might come as welcome news to Microsoft’s users, who have been barraged in recent weeks with information about newly discovered flaws in a range of the company’s products. The most recent revelation involved a “critical” flaw in the DirectX graphics interface in almost all Windows installations.
Meanwhile, across the country, the judge who approved Microsoft’s still-controversial settlement with the U.S. Department of Justice said the company is making progress in complying with the order, citing moves to revamp licensing agreements between Microsoft and third-party software firms. Microsoft has revamped its licensing deals to reduce up-front payments and royalty rates.
U.S. District Judge Colleen Kollar-Kotelly said Microsoft has “been responsive” and is making progress, but she also said she will continue to “watch closely.”