Gates: Microsoft To Spend $40B in R&D

Microsoft Chairman Bill Gates told more than 100 CEOs that Web services--and Microsoft's software in particular--are quietly driving a "rewiring of the economy" in the post-dot-com era.

Gates said the pending beta of the next version of Visual Studio--together with Web service standards and new speech, collaboration and wireless applications--will simplify business-process re-engineering and boost information worker productivity.

"This statement is like deja vu. People said that in the late '90s and didn't most of them go out of business? Yes. But the difficult work to make this happen has only been taking place now," Gates told CEOs gathered at Microsoft's Redmond, Wash., headquarters for its eighth annual CEO Summit. "Technology that lets companies connect together the fundamental technology is called Web services. ... The foundation has been laid over the past few years, and you'll see it accelerate in a pretty dramatic way."

Microsoft's chief software architect acknowledged that the downturn in the economy, a swing back to server-based computing and PC security problems have interrupted new uses of the Windows desktop and put many IT projects in hiatus.

However, he tried to steer the audience to new technologies, including security fixes and virus-isolation technologies, that will spur renewed faith and a resurgence in the PC desktop as well as Web-based mobile devices.While Gates predicted an explosion in entertainment and digital lifestyle applications on televisions and mobile devices, he said Microsoft will spend more than $40 billion on research and development over the next six years to redefine business productivity and rewire the economy.

In large part, Gates used the podium to pitch several Microsoft technologies aimed at pumping up worker productivity. These include Visual Studio, Infopath, Tablet PC, Office Live Meeting and Speech Server. He said RFID technology is also becoming increasingly important.

Gates, for instance, demonstrated a new modeling tool in the Whidbey version of Visual Studio, code-named Whitehorse, that will allow corporate developers to collaborate with business analysts to redefine business processes and speed up application development.

"Business processes at companies today are represented by lots of code. The unfortunate thing about this is if you want to change that process, it's very expensive," Gates said. Whitehorse and other Web services tools will allow business analysts to build process models from templates and customize their operation at significantly lower costs. It's about "seeking lower and lower transaction costs, and the 'rewiring the economy' is about moving that trend," Gates said.

"The work we're doing at Microsoft is building software delivering on a dream of seamless computing where your information is there when you want it and all systems are connected together with no manual effort. We've achieved a lot of the dreams we've had for more than a decade," Gates said. "The goal of seamless computing is to deliver more productivity and get more value out of the information worker."0