Microsoft CEO: to increase investment in R&D in fiscal 2015

Microsoft CEO Satya Nadella today said it will be increasing its investment in R&D and sales for digital work and life businesses in fiscal year 2015.

It is also aiming to cut total operating expenses.

Also read: Microsoft revenue up 18% in Q4, net income increases 7%

“We have a rich roadmap going forward. Two examples of our innovation are what we are doing with Delve and Skype Translator,” said Satya Nadella, chief executive officer of Microsoft.

“Delve is an Office 365 cloud-based service that is the first in the new breed of intelligent and social work experiences. Delve will turn enterprise search on its head as information that is relevant to you finds you,” Nadella added.

Skype Translator will break down the language barriers in our communications and impact everything from everyday conversations with friends to education to global business.

Microsoft CEO Satya Nadella

Talking about Q4 2014 financial performance, Microsoft CEO said: “We are galvanized around our core as a productivity and platform company for the mobile-first and cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution.”

The company said investments in cloud infrastructure are necessary to support the growth in its cloud services.

“In Q1, we expect Capex (capital spending) to increase sequentially to support our growth. Similar to fiscal year 2014, these investments are decided based on the thorough review of demand and capacity plans to ensure that the investments provide an appropriate return on capital,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

In computing and gaming hardware, Microsoft expects revenue to be $1.7 billion to $2 billion. This range reflects the continuing ramp of Surface Pro 3 and Xbox 1 as both products are introduced into new markets in Q1.

In phone hardware, Microsoft expects revenue to be $1.9 billion to $2.3 billion as it de-aligns the device portfolio to our strategy. In devices and consumer other, Microsoft expects revenue to be $1.8 billion to $1.9 billion.