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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.

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