Q&A: Microsoft's next big thing

Computerworld - Craig Mundie, 59, is Microsoft Corp.'s chief research and strategy officer. He assumed his position as chief visionary in June 2008 after Bill Gates retired from day-to-day operations at the company.

In his current role, Mundie is responsible for the long-term strategic direction of the business and recently completed a technology tour of U.S. colleges. Microsoft Research has 800 researchers in six locations worldwide. The company plans to spend more than $9 billion on R&D this year, up from $8.2 billion in 2008.

Microsoft announced some belt-tightening recently. How will that affect the R&D budget and your priorities? Will you scale back on basic research, as some competitors have? No. We have an opposite view on that, which is the tighter the economic times, the more the focus has to be on maintaining your R&D investment broadly.

You want the normal cycle to produce timely results, but we've always believed that the pure research component was critical to us for several reasons. It gives us the ability to continue to enhance the businesses we're in. It gives us the ability to disrupt certain industries that we choose to enter [and] it's a shock absorber that allows us to deal with the arrival of the unknown from competitive actions or other technology breakthroughs. In these uncertain times, all three of those things are important to us.

So, no substantive changes despite the economy and staff cutbacks? Yes. We did our first cross-company layoff in January -- about 1,400 people -- and we'll continue to make adjustments up to a total of 5,000 people in the course of the next 18 months. But a lot of this is not strictly cost restructuring but a resource reallocation mechanism in order to fund the things that we think we need to grow.

We believe that the economy is heading for a reset, not something from which there's going to be a nice, quick, happy rebound. We've taken our cost structure down to a level that we think is sustainable against that kind of economic outlook.

There are several different ways we seek to insert innovation into the products. First, we develop new features for the products we have. Second, we create new products and put them alongside the products we already have.

For example, we created OneNote because we thought there was going to be a new requirement for this type of more preformed "notebook/handwriting/aggregate everything" type of capability that didn't fit naturally within the mission of Word, PowerPoint and the other products that are part of the Office suite. So we put a new product in there. That didn't create any new compatibility problems but produced a whole new capability.

As we look in the platform and tools areas toward the future, we expect that there's a lot of change coming in the underlying architectures -- for example, like virtualization and the fact that there will be many CPU elements that actually allow some of the side-by-side execution of things. That can provide perfect compatibility while still allowing the introduction of things that represent whole new capabilities.

Have you ever been disappointed that a great technology didn't take off as well you expected? One of the biggest areas I championed in my early years here in the early 1990s was interactive broadband television. We had many of the ideas, perfected a lot of the technology in the '90s, and we're sitting here in 2009 just starting to see a significant global ramp-up of that as a successor to traditional television.

It's certainly been a disappointment to me that the collective things necessary to make that happen -- for example, broadband network penetration and performance and things like that -- have lagged so far behind globally, and especially in the United States. Things that are very interesting technologically for the user are just not being brought to market at the speed I would have hoped for.