Microsoft announces huge R&D Boost

Microsoft has shrugged off economic fears and a down turn in IT spending by announcing ambitious R&D plans. Bill Gates says the company is to hire 5000 more workers and boost research spending by 20%.

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By  Neil Denslow Published  July 28, 2002

Microsoft has shrugged off economic fears and a down turn in IT spending by announcing ambitious R&D plans. Bill Gates said that the company was set to hire 5000 more workers and boost research spending by 20% to accelerate the development of new products.

By next June, Microsoft’s R&D budget will be US$ 5.3 billion and the worldwide workforce should hit 55,000. “We are increasing the level of investment for the future,” Gates said.

The spending boost is part of Microsoft’s push to switch from being a PC software company to a provider of web services.

“I think it’s a huge bet,” Kim Caughey, an analyst with investment firm Parker/Hunter told the BBC.

“[However,] if they can get businesses to publish web services that quickly I think they’ve got a bright future,” he added.

Microsoft’s plan is to move customers to web-based computing within the next few years. The process will be done in three stages, followed by the next major upgrade of the Windows operating system.

The Richmond giant argues that the plan will cut the company’s exposure to the cyclical nature of hardware purchases.

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