REDMOND, WASH. -- Microsoft Chairman and Chief Software Architect Bill Gates here on Tuesday told a crowd of approximately 300 university faculty members that his company plans to make R&D (research and development) spending a priority this year, to the tune of $5.3 billion.

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Speaking at the Microsoft Research Faculty Summit 2001, Gates said that 90 percent of Microsoft's $5.3 billion figure will go toward software research.

"We think this is key to our long-term position," Gates said.

He cited areas such as productivity, reading, e-commerce , and communications as important focal points for Microsoft research.

Douglas Leland, the director of Microsoft research's university relations group, said the company typically directs 16 percent of its revenues toward research and development.

In contrast, IBM spent more than $5 billion on research last year, Intel invested nearly $4 billion, and Oracle and Sun each dedicated more than $1 billion in 2000. Last year Redmond, Wash.-based Microsoft spent a little more than $4 billion on research and development.

One of the early fruits of Microsoft's research will be the TabletPC, a new thin form factor for a PC that Microsoft has demonstrated prototypes of on several occasions, including here on Tuesday.

Gates brought Bert Keely, a member of the TabletPC team, onstage to demonstrate the latest version.

"What differentiates a TabletPC from a desktop or even a laptop is that when you leave your desk, you take [it] with you and it keep working," Keely said.

Keely added that TabletPCs, when they ship next year, will most be equipped with DVD-ROM drives, 128MB RAM, 20GB disks, and will be less than 1 inch thick.

"We have the luxury of being able to take a long-term goal of things, and we think the next 10 years is going to be a golden age of software," Gates said.

To that end, and targeting the academic community as a driving force, Gates also announced Visual Studio.NET Academic Edition, which includes features such as Assignment Manager that are specific for the academic community.

"In the past, there were no features or functions in the product specifically for academics, there was just the deep discounts in pricing," said Dennis Crain, Microsoft's product manager for Visual Studio Academic.

Finally, Microsoft announced the Windows CE 3.0 Shared Source Licensing Framework, which makes code available to users so they can play with it but cannot redistribute any changes for commercial purposes.