Microsoft to spend big on R&D next year

Software giant Microsoft is facing growing challenge from online service providers and they are planning to strike back big time.

The company has announced their decision to spend around $7.5 billion on research and development in fiscal year 2007.

This is around $1.3 billion more than previously committed. This decision to raise spending on research and development work was announced by Chief Executive Steve Ballmer.

Ballmer said: “I estimate off the top of my head that approximately half a billion of that will be spent in Europe.”

He also admitted that for a change they are facing competition from rivals like Google in their quest to hire the best in the market.