Microsoft 2010 Annual Report Download - page 13

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12
Investing in Business and Product Development
Innovation is the foundation for Microsoft’s success. Our model for growth is based on our ability to initiate and
embrace disruptive technology trends, to enter new markets, both in terms of geographies and product areas, and to
drive broad adoption of the products and services we develop and market. We maintain our long-term commitment to
research and development across a wide spectrum of technologies, tools, and platforms spanning communication
and collaboration; information access and organization; entertainment; business and e-commerce; advertising; and
devices.
Increasingly, we are taking a global approach to innovation. While our main research and development facilities are
located in the United States, in Redmond, Washington, we also operate research and development facilities in other
parts of the United States and around the world, including Canada, China, Denmark, England, India, Ireland, and
Israel. This global approach will help us remain competitive in local markets and enable us to continue to attract top
talent from across the world.
We invest in innovation by focusing on the emerging technology trends and breakthroughs that we believe offer
significant opportunities to deliver value to our customers and growth for the company. Microsoft Research is one of
the world’s largest computer science research organizations, and works in close collaboration with top universities
around the world to advance the state-of-the-art in computer science, providing us a unique perspective on future
technology trends.
Based on our assessment of key technology trends and our broad focus on long-term research and development of
new products and services, areas where we see significant opportunities to drive future growth include:
Cloud computing and software plus services
The ability to combine the power of desktop and server software with the reach of the Internet is creating
important opportunities for growth in almost every one of our businesses. Accordingly, we are focused on
innovation and broadening our platform to develop a cloud computing ecosystem that positions us for success
in areas including virtualization, management, and security identity. We are also focused on delivering end-to-
end experiences that connect users to information, communications, entertainment, and people in new ways
across their lives at home, at work, and the broadest possible range of mobile scenarios through investments in
datacenters; new versions of Windows and Office that are designed to support a wide range of connected
scenarios; solutions for businesses that can be deployed by a customer, by a service provider like Microsoft, or
by a Microsoft partner; tools for developers and Web designers; and consumer products and services including
Xbox 360, Xbox LIVE, Windows Live services and Zune.
Natural user interfaces
The next few years will also see dramatic changes in the way people interact with technology as touch,
gestures, handwriting, and speech recognition become a normal part of how we control devices. This will make
technology more accessible and simpler to use and will create opportunities to reach new markets and deliver
new kinds of computing experiences. Our long-term investments in natural user interfaces can be seen in
products like Windows 7, the Microsoft Auto software platform and Kinect for Xbox 360. We believe sensory
input is just one aspect of Natural User Interface technology, and we are researching the impact of several
“interaction paradigms” such as contextual awareness and environmental awareness.
New scenario innovation in key industries
Continuing improvement in the power of computers and devices and the speed and ubiquity of networks is
creating opportunities to deliver innovation that will transform a number of key industries and address significant
global issues including healthcare, environmental sustainability, and education. In healthcare, for example,
computing will connect personal health information to medical research and help make healthcare more
preventive, personalized, and cost-effective. Today, Microsoft products such as HealthVault and Amalga help
individuals manage their personal health and enable healthcare professionals to integrate research and health
information so they can deliver more effective care. We also believe that we are entering a period where
personal computers will play an increasingly important role in virtually every field of scientific research and
discovery.