Microsoft To Spend $9.5 Billion On R&D This Year

A decade ago, Microsoft was clearly leading the tech industry. But the Redmond-based company is now facing stiff competition from tech juggernauts Apple and Google. In an effort to develop killer products that would keep Apple and Google at bay, Microsoft plans to spend a massive $9.5 billion on research and development this year, which a senior executive said the figure is $3 billion more than the next closest technology company.

Microsoft’s chief operating officer Kevin Turner spoke at the CeBIT trade show in Hannover, Germany that much of this multi-billion dollar investment will be centered around improving software in the cloud.

“Especially in light of the tough difficult macroeconomic times that we’re coming out of, we chose to really lean in and double down on our innovation,” said Turner. “We’re going to change and reinvent our company around leading in the cloud.”

Tuner also claimed that Microsoft offers more cloud services than any other company, ranging from its consumer email service to hosted enterprise products such as its Dynamics CRM (customer relationship management) system to its Azure cloud operating system.

“We’re going to change and reinvent our company around leading in the cloud,” Turner said.

Apparently, Microsoft may require serious reinvention. One quintessential example would be its desktop-based Office productivity series, which seems to be losing customers due to increasing pressure from Google Docs, a free platform that allows users to create and edit web-based documents, spreadsheets and presentations.

Besides that, Microsoft’s forthcoming Windows Phone 7 Series operating system is also facing heavy competition from Apple’s iPhone and Google’s Android — the two biggest names in the smartphone OS market. However, Turner defended the company’s Windows Phone 7 Series, which he said is a complete overhaul from previous ones and is tightly integrated with its sister products — Xbox gaming and Zune music products.

Meanwhile, Bing’s market share is on the rise while Google and Yahoo continue to decline. Its share of the U.S. search market rose to 11.3 percent in January from 10.7 percent in December while Yahoo! and Google saw their share dip from 17.3 percent to 17.0 percent and 65.7 per cent to 65.4 per cent respectively. The growing rift between Microsoft and Google becomes prominent when Yahoo! and Microsoft unveiled a 10-year Web search and advertising partnership in July that set the stage for a joint offensive against the Mountain View company.

It is widely acclaimed that Microsoft’s innovative efforts lack the focus of Apple’s because the latter is dedicated to a clearly defined customer and tries fewer things, but provides enough resources to ensure their success. Will the tech giant be able to come up a couple of killer products to reduce the number of competitors even with the huge sum of money still remains a big question mark.

Via The Inquirer