Mutual Benefit — Microsoft’s Investment in European Innovation

As Microsoft CEO Steve Ballmer visits Europe to announce new Search investments — with centres of excellence based in France, Germany and the UK — EMEA Press Centre looks at some of Microsoft’s key European research ventures, and a reciprocal relationship that brings huge benefits to the company and the continent.

PARIS, France — 2 October 2008 — At heart Microsoft is an innovation company, and at the heart of innovation is research and development (R&D). From the very beginning, Microsoft has sought out those individuals and regions rich in innovative talent, and so it is no surprise to learn that Microsoft has a long history of investments in Europe. With Search now on innovation’s frontline, Microsoft’s new Search Technology Centre and investments in European companies such as Multimap and Greenfield/Ciao are strengthening an established and integrated innovation network that spreads across a continent. It is a network that includes more than 40 research and development facilities in 19 EU nations. Last year, Microsoft invested more than €430 Million in research and development in Europe.

Microsoft CEO Steve Ballmer, speaking in Europe to announce the Search Technology Centre, underlined Europe’s importance to the company, “To compete in a global, innovation-driven economy, we need to draw on the talent and skills of the world’s smartest, most creative minds. Increasingly, we are turning to Europe to find the talent we need. With 2,000 scientists, engineers, and developers, Europe has Microsoft’s largest concentration of R&D staff outside the United States.

Encouraging innovation

In 1997, Microsoft recognised that innovation knows no borders and set about establishing the first Microsoft Research facility outside of the US, both to engage with the European research community and to tap into the continent’s rich talent pool.

Microsoft Research Cambridge (MSRC) was established in the famous British university city, with a clear focus on advancing the state of the art in computing. In a little over ten years it has grown rapidly, expanding from three researchers to just over 100 and moving into a new, purpose built lab. MSRC has taken its place as a leading European research facility, contributing to a host of Microsoft innovations that are now part of users’ everyday lives. MSRC’s work ranges from bioinformatics, to large-scale networks and applied games. Though based in the UK, 22 nationalities contribute to lab’s research.

Andrew Herbert, MSRC’s Managing Director, is clear about the advantages of a European research presence, "Europe is a global crossroads, with many distinct languages, cultures and traditions coming together in a creative and dynamic region, which has historically generated great centres of learning and world-changing ideas. Microsoft’s investment in the Cambridge lab is a two-way relationship: working collaboratively with academics and students at leading research universities across the region; allowing Microsoft to benefit from Europe’s rich intellectual and scientific resources; and, at the same time, encouraging European innovation."

An integrated innovation network

In 2003 Microsoft’s work to help realise Europe’s potential stepped up a gear with the establishment of the European Microsoft Innovation Centre (EMIC), a facility for applied research and technology development, based at Aachen in Germany. Working with around 100 European partners, EMIC contributes to collaborative ICT projects — sponsored by the European Commission, as well as national and local governments. The aim is to harness Europe’s technology strengths and apply them to regional challenges. Working with academic institutions and industry partners, EMIC scientists and engineers concentrate on web services, security applications and wireless technologies.

Taking EMIC one step further in 2005, Microsoft developed a network of innovation hubs, known as Microsoft Innovation Centres (MICs) that focus on national and regional needs. MICs are often based on local partnerships, bringing together governments, businesses, developers and academia. They offer local access to world-class Microsoft consultants, facilities and resources to foster the next generation of innovative professionals. In just three years, 32 MICs have grown up across Europe — with Belgium, Bulgaria, Croatia, the Czech Republic, France, Germany, Greece, Hungary, Italy, Kazakhstan, Latvia, the Netherlands, Poland, Portugal, Romania, Russia, Slovenia, Spain and the UK all part of a network that is set to grow further in the near future.

A core Microsoft objective is to encourage innovative potential, identifying and nurturing it from the earliest point possible. Microsoft is rolling out a network of School Technology Innovation Centres (STICs), with three already up and running in Europe based in Belfast, Brussels and Prague. They allow educators to assess and become familiar with new teaching technologies, helping to inspire Europe’s children to take advantage of ICT’s opportunities.

Developing business solutions — and talent

Microsoft also benefits from the European human resources it is helping to create. Microsoft Development Centres (MDCs) make a very real contribution to the company’s products and services and are sited across Europe — calling on the region’s unique mix of skills and know-how. With more than 900 employees, the MDC at Copenhagen in Denmark is the largest outside of the US. The software development facility brings Microsoft Business Solutions together with Europe’s developer community to help foster growth in the small and medium-sized enterprise sector.

Linking in with the Danish facility and other MDCs around the globe is Microsoft’s European Development Centre in Dublin, Ireland, taking software research and development through to engineering and localisation across many of Microsoft's different business groups. Irish expertise is harnessed across a range of critical Microsoft areas, including Windows Media Centre, Windows Live development, security, anti-virus research, and the localisation of over one hundred products and services — from Microsoft Office to MSN and Xbox — into over 30 languages.

The Microsoft Development Centre Serbia (MDCS) is working to improve the experience of Microsoft Windows Mobile users around the world, while also strengthening the local ICT economy. MDCS is developing code for Microsoft Tablet PC technology, capturing handwritten notes on screen, which can then be converted into text. At present, Tablet PC handwriting recognition exists only for four major East Asian languages and five major Western European languages. Work carried out at in Belgrade will expand support for handwriting recognition for more languages. The MDCS also provides support for the storage, querying and manipulation of spatial data — work that is playing a big part in Microsoft technologies like Virtual Earth.

A mutually beneficial partnership

Europe is a continent that drives and increasingly depends upon ICT and innovation: it hosts seven of the ten most innovative economies in the world; and ICT is responsible for 25 per cent of EU GDP growth and 50 per cent of EU productivity growth. As traditional, heavy industries migrate to follow low-cost labour, ICT is Europe’s key differentiator and its future.

It is a future that Microsoft wants to share; Ballmer recognises and underlines the importance of the relationship, "Microsoft is a big part of Europe’s social, technological and economic growth, with 2,000 of our employees deployed in European research and development. But Europe is also a big part of Microsoft’s own success and this is not simply in terms of sales that add to the bottom line; it is in the vast innovative resources that the continent offers. It is hardly surprising then that we have made long term and high value investments in European economies, businesses and individuals — and will continue to do so."