In a lecture last Wednesday Kevin Turner, Microsoft’s Chief Operating Officer, presented an optimistic perspective for Microsoft’s future, stressing that it is now “time to get back to business”.
According to Turner, the economic downturn gave Microsoft the opportunity to re-evaluate its expenditure and streamline activities by cutting loss-making operations. The company will invest $9.5 billion in Research and Development this year, a record figure that sets Microsoft above all other companies in terms of investment.
Turner stated that Windows 7 will be the product that will lead Microsoft’s expected growth this year. Already the operating system’s sales have boosted Microsoft’s quarterly profits by 60% and has generated “lots of momentum” in terms of consumption, now running over 9 out of 10 computers worldwide. With 90 million copies of Windows 7 sold since its October 2009 launch, Microsoft is expecting sales to reach 300 million by the end of the year.
He further said that the improved Xbox video game console will be an important product development for Microsoft. The new console will feature advanced control operations that use the entire body. Turner was also enthusiastic about Microsoft’s stake in the Facebook enterprise, saying “[Microsoft has] a great relationship with Facebook and we expect it to deepen”.
The nature of the consumer has changed after the economic crisis, Turner said, becoming more conservative as “most people are on new budget cycles”. This means that any company growth will “be more a gradual thing”. Turner stayed vague about specific revenue forecasts.
On the international front, Microsoft will focus on investing in fast developing markets, especially India, Russia and Brazil. However, Turner said that Microsoft would not consider investment in China, “until we can work with China to respect intellectual property rights”. The Chinese government would have to change the entire nature of their Intellectual Property Right legislation before Microsoft considers investing in that economy. He reinforced his point with statistics showing that out of the 98% usage of Microsoft software in China, only 10% is legitimately paid for. “This is a real barrier from a software standpoint,” commented Turner.
Turner also spoke of the software industry’s new regulations. Microsoft is keen to build strong government relationships by working with international regulatory bodies. “We’re global but we must localise for core compliance,” argued Turner. Regarding Microsoft’s alleged complaints against Google made to the European Commission, Turner stated “Every competitor we have makes us a better company.”
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