REDMOND, Wash. (DOW JONES)--Microsoft Corp. will spend about $6.8 billion on research and development in its new fiscal year, an increase of 8% from the previous 12 months, said Chairman Bill Gates.
"We are just at the beginning of what we can do with software" and Microsoft is investing heavily in research because of "the opportunities we see," Gates said Thursday at the company's annual meeting for financial analysts. Its fiscal 2004 began July 1.
Although the Redmond, Wash., company is still reliant on advances in microprocessors and hardware design, it is forging ahead in various areas of software innovation, including desktop management, unified storage, and e-mail sharing, Gates said.
The Microsoft founder and chief software architect said he was pleased with progress the company is making on its work on the next-generation of its Windows operating system, code named Longhorn.
"It's a big bet for us," Gates said. "We don't know the exact time frame, but it's many years of work."
Jim Allchin, head of the Windows division, said the company plans to introduce a beta, or test version, of Longhorn technology late next year. The company is also working on Longhorn versions of its Office business suite and server products.
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