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UPDATE: Microsoft, Taiwan To Develop Cloud Computing Technology

(Adds comments from Ballmer on the company's planned investment in cloud computing; details of Microsoft's MOU with Chunghwa Telecom.)

By Jessie Ho

Of DOW JONES NEWSWIRES

TAIPEI -(Dow Jones)- Microsoft Corp. (MSFT) plans to spend US$9.5 billion in research and development projects in 2010, a considerable portion of which will go to cloud-computing technologies, the U.S. software giant's Chief Executive Steve Ballmer said Wednesday.

Microsoft, which recently launched its latest Windows 7 operating system, signed a memorandum of understanding Wednesday with Taiwan's government to jointly set up a research center for cloud computing on the island.

Microsoft and Taiwan's Ministry of Economic Affairs will jointly establish the "Software and Services Excellence Center" on the island, Microsoft said in the statement, without disclosing the size of its investment.

Ming-Ji Wu, director general of the economic ministry's Department of Industrial Technology, said the center will be set up before the end of 2009.

Microsoft said the venture is aimed at helping local contract makers of electronics products develop devices and services related to cloud computing--an emerging technology that allows users to access data saved in remote servers through phones or computers.

Barry Lam, chairman of Quanta Computer Inc. (2382.TW), the world's largest contract notebook maker by revenue, said in late October the company will focus on developing and making cloud computing servers in the coming years.

Speaking on Windows 7, Ballmer said the overall market response is good.

"I certainly think in the consumer market Windows 7 will take over very quickly, and it will be surging in the business market," Ballmer told reporters in Taipei, where he hosted a forum on cloud computing.

Ballmer said he expects 300 million personal computers to be sold worldwide in 2009.

"For the next 20 years, we are going to teach computers to recognize your voice and image," Ballmer told reporters on the eve of Microsoft's 20th anniversary of operations in Taiwan.

Ballmer, who arrived in Taipei Tuesday and is leaving later Wednesday, also signed an MOU with Chunghwa Telecom Co. (CHT), Taiwan's largest phone services provider by revenue, for Microsoft to offer online software to Chunghwa Telecom's customers, and to let Chunghwa Telecom deploy the Windows Azure operating system for its cloud-technology applications.

-By Perris Lee Choon Siong and Jessie Ho, Dow Jones Newswires; +8862-2502- 2557; perris.lee@dowjones.com; jessie.ho@dowjones.com

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  11-04-090438ET
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