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Microsoft to spend 90% of its Research Budget on Cloud computing

Microsoft to spend 90% of its Research Budget on Cloud computing

Microsoft has announced that it will be spending 90% of its $9.6 billion research budget on improving cloud computing technologies.

In a statement by President Jean-Phillipe Courtois, the company outlined its strategic vision to engage with more small and medium-sized enterprises and boost its market share and make gains on its rival providers Salesforce.com, Oracle and SAP. According to Mr. Courtois, the technology will help Microsoft grow its profits, especially in emerging markets. In the global cloud computing market, Microsoft currently lags behind trailblazer Salesforce.com, SAP and Oracle.

Further comments by Microsoft CEO Steve Ballmer indicated that the firm is at war with its rivals in the Enterprise Resource Planning (ERP) sector. In an interview with to Reuters, Ballmer said: “The opportunities to make a good business [out of ERP] economically are wonderful.”

At Microsoft Dynamics Convergence 2011 held Tuesday in Atlanta, the company announced that it will be launching cloud computing offerings with its next major release of Dynamics ERP solutions, to run on the Windows Azure platform. It has a marketplace for Dynamics where independent software vendors (ISVs) and partners can showcase solutions, add-ons and services.

According to industry experts, much of the Redmond-based giant’s profitability is made through its enterprise products, meaning that the implementation of a stronger focus on cloud products is critical to enable it preserve its domination of the business software market. Products like Google Docs and others have threatened to undercut Microsoft’s position in the sector, while cloud innovations from competitors such as Amazon have provided flexible new options for budget-minded businesses.

Nevertheless, in an interview with Bloomberg, Courtois indicated that Microsoft’s prospects look healthy for the immediate future, and commended the company’s strong presence in emerging economies as the bulwark of its overall financial performance.