Microsoft plans 21 percent increase in R&D spending

Posted: Thursday, July 26, 2001

REDMOND, Wash. (AP) -- Microsoft Corp. will spend $5.3 billion on research and development over the next year, a 21 percent increase, chairman Bill Gates said.

Despite widespread layoffs and cutbacks in the technology sector this year, ''we've decided to go full speed ahead,'' Gates said Tuesday. ''We think this is key to our long-term position.''

The research spending amounts to about 18 percent of the sales Microsoft has projected in fiscal 2002, compared with 17 percent this year.

Addressing about 300 computer science professors at a research conference at the company's complex in this Seattle suburb, Gates said 90 percent of the $5.3 billion would go to personnel in Redmond, at laboratories in England, China and San Francisco, and in partnerships at universities worldwide.

Subjects of the research include productivity, software to be updated automatically via the Internet, reading digitized information, electronic commerce; communications and meetings, and television, games, music, movies and photos, he said.

Computers should have a red or yellow feedback button to be pushed whenever a user has a software problem, sending the information to Microsoft, which would then reply with a solution over the Internet.

Computer-displayed text has advanced to the point where ''digital basically has triumphed over paper-based approaches,'' except for magazines and long e-mail, he said.

Computers also may someday displace telephones, he suggested.

''Our view is that real-time communications ... will be screen-based in years ahead,'' Gates said.

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