When the going gets tough, Microsoft steps up spending

By Alun Williams

Posted on 26 Jul 2002 at 14:37

Microsoft is to invest 5,000 jobs and $1bn of spending on R&D as it seeks to boost its .Net Web services strategy, stage 2 of which is now on the horizon.

Bill Gates has revealed that Microsoft will be investing an extra $900m in R&D in the coming fiscal year, increasing its spending on new hardware and software technologies by 20 per cent, to $5.2 billion. Speaking at a meeting with financial analysts, he also anticipated adding 5,000 new staff to Microsoft's 50,000 payroll.

A lot of this investment will go towards beefing up Microsoft's .Net Web Services. This is Microsoft's strategy for connecting people with information - via the Web - in a pervasive, device-independent way. In the same meeting, reports The New York Time, Bill Gates acknowledged IBM's lead in this area. Recognising the existing presence of IBM's WebSphere in the Web Services market, Gates gave limited approval to Microsoft's delivery, so far, of .Net services.

Speaking quite candidly, the Microsoft chairman and chief software architect, has given his company a report rating of 'C' for its implementation of .Net. 'In some respects we're further ahead than we expected. In some respects we haven't made as much progress as we expected,' said Gates. While acknowledging the success of Visual Studio.Net in delivering tools to build the Web Services that are intended to provide the next generation of e-commerce, some areas were described as 'incomplete'. This included the security features of the Web strategy.

Bill Gates revealed that people still ask him what .Net actually is. His answer being the phrase 'software to connect information, people, systems and devices'.

Interestingly, Gates also re-emphasised the importance of XML to Microsoft. This is the standardised, non-Windows specific 'extensible markup language' that helps transmit the logic of data across the Net. Widely adopted, it is seen as the technology that will underpin the 'personalisation of the Web', particularly for delivering customised services across the Web.

The day before, Gates had outlined the company's road map for 'phase two' of .Net. This involved: building on Windows .NET Server to connect businesses across networks; improving security and reliability via the 'Palladium' architecture for creating 'trusted' hardware and software systems; real-time communications and collaboration (RTC) server software code-named 'Greenwich'; integration with the next version of SQL Server, codenamed 'Yukon', that will have a new data storage architecture; and integration with the upcoming Windows XP Media Center Edition for sharing digital content.

It has also been announced that Microsoft will be updating its .Net development tools this autumn. Visual Studio.Net - the Web services version of its well-established programming environment - appeared in February and arguably represented the first real .Net release from Redmond.

Improved security features will be part of the update, along with performance enhancements and integration with the upcoming Windows .Net Server software. New visual design tools and support for the new SQL Server architecture are on the horizon for late 2003.