Microsoft invests in R&D as economy slumps

In today's podcast: Microsoft invests in R&D as economy slumps; netbook processors a cheaper option for data centers; and OLPC turns to large-scale PC deployments.

Subscribe to this podcast in iTunes!

Microsoft plans to continue spending and trying to increase market share in key areas despite the current global recession, which can be a good opportunity to invest strategically for the economy's eventual turnaround, Microsoft CEO Steve Ballmer said Tuesday. However, in his discussion to members of the financial community, Ballmer reiterated that he does not expect the economy to improve very quickly, so Microsoft is prepared to hunker down and spend carefully until it does. Ballmer said to figure out how, he's taking cues from how companies handled previous economic crises, most notably the Great Depression of the late 1920s and 1930s in the U.S. Microsoft is following the example of one company in particular, RCA, which kept investing in research and development during the Depression and afterward dominated its industry, Ballmer said. Microsoft, too, will try to make gains in some areas where it can improve its market-share position while the economy is down.

It sounds crazy to use processors designed for tiny netbooks in data centers, with their potentially massive computing requirements, but Microsoft is experimenting with doing just that and finding that it may lead to cost savings. A netbook processor uses one-fifth or one-tenth the power of a typical server processor, offers about one-third the performance and is cheaper than server processors, said Jim Larus, director of software architecture for data-center futures, a group within Microsoft's Research group. That means that even though a data center would require three times as many netbook processors, the power requirement would still be lower than that of typical server processors.

Nonprofit organization One Laptop Per Child is shying away from small deployments of XO laptops to focus on large-scale deployments as it restructures to cope with the recession. OLPC is not selling laptops individually anymore and will focus on large-scale deployments that could top millions of laptops in countries, OLPC founder and Chairman Nicholas Negroponte said in an e-mail interview. The nonprofit is breaking up its operations based on regions for a targeted focus on those deployments. The change was partly triggered by a drop-off in interest in the group's Give 1 Get 1 program, which was a big source of funding for OLPC. Under the program, a consumer could donate US$400 to OLPC for two laptops, with one of them delivered to a child in a developing nation.

Microsoft is pushing out a software update to some Windows users that fixes a bug in the Windows AutoRun software, used to automatically launch programs when DVDs or USB devices are introduced to the PC. The bug fix, delivered through Microsoft's standard automatic update systems, comes one month after the U.S. Computer Emergency Readiness Team issued a security alert warning that Windows did not properly disable AutoRun on Windows 2000, XP and Server 2003. Microsoft had said that technical users could disable AutoRun by making changes to the Windows Registry. The problem was that, even with this change, some versions of Windows would launch AutoRun programs whenever the user clicked on a device's icon using Windows Explorer.

...And those are the top stories from the IDG Global IT News Update, brought to you by the IDG News Service. I'm Sumner Lemon in Singapore. Join us again later for more news from the world of technology.