LONDON - June 17, 1997 - Microsoft^® Research, Microsoft Corp.'s 6-year-old basic research arm, today announced a £50 million (U.S. $80 million) investment to establish a basic research lab in Cambridge, U.K. The lab, to be known as Microsoft Research Ltd., will collaborate closely with Cambridge University to conduct basic research in computer science.

"Our goal with this Cambridge-based research lab is to create a home for those world-class researchers based in Europe who want to develop innovative new technologies and have an impact on the lives of millions of people around the world," said Nathan Myhrvold, Microsoft's chief technology officer.

In addition to the Cambridge lab announcement, Microsoft also said it would invest £10 million (U.S. $16 million) in technology ventures, with an emphasis on Cambridge-area technology firms.

"We are thrilled that Microsoft Research has chosen the U.K. and Cambridge University as the site of its first research facility outside the U.S.," said Professor Alec Broers, head of Cambridge University and its vice chancellor. "We look forward to a fruitful relationship that will push the envelope on computer science and software engineering and cement Cambridge's leadership role in developing cutting-edge technologies."

For more than six years, Microsoft's Redmond, Wash., campus in the United States has been home to Microsoft Research, which today supports more than 200 computer scientists and engineers conducting research into areas such as computer graphics and vision, speech recognition, decision theory, data mining, natural language processing and user interface technologies. Microsoft Research's impact has been evident in many of the company's products, including major releases such as the Windows^® 95 operating system and Office 97.

"In 1991, we identified the need to create a world-class research organization that would produce cutting-edge technology for our customers," Myhrvold said. "Since that time, Microsoft Research has produced enormous benefits for Microsoft and our customers through innovative technologies. Today, we are building on that success with Cambridge University, which possesses a well-deserved reputation and rich history as a leading research center."

Microsoft Research's Redmond lab will continue to be the heart of the company's basic research efforts, continuing with its plan, announced late last year, to triple basic research spending over the next three years.

"Our goal at Microsoft Research is to move the state of the art forward," said Rick Rashid, vice president of Microsoft Research. "The addition of Microsoft Research Cambridge will further strengthen that effort and result in the creation of new ideas and technologies that will benefit computer users throughout the world."

The director of Microsoft Research Cambridge will be Roger Needham. Currently, Needham is professor of computer systems in the university's Computer Laboratory and pro vice chancellor of the university. Microsoft Research Ltd., which will be located in central Cambridge, already has begun hiring researchers from Europe, expecting to build up to 25 researchers in its first year.

Initial lab hires include Needham; Derek McAuley, formerly a computer science professor at the University of Glasgow; and Charles P. Thacker from Digital Equipment Corp.'s U.S. systems research center. As part of its collaboration with Cambridge, Microsoft Research will work closely with the staff and students at the university's existing Computer Laboratory.

As its Redmond lab has done with U.S. researchers, Microsoft Research will create a European technical advisory board, or TAB, that will be composed of researchers and academics from across Europe. The purpose of the TAB will be to attract researcher candidates and help advise on the efforts of the Cambridge lab.

Venture Capital Investment

Demonstrating Microsoft's commitment to developing and fostering new technologies, the company also announced that it would invest £10 million in small technology companies, with an emphasis on Cambridge-area firms.

The company will invest £5 million in Amadeus I, a new venture capital fund created to support early stage technology companies with global potential. The remainder will be reserved for future investment opportunities. Amadeus I is the first fund of the Amadeus Capital Partnership, founded by Anne Glover, Peter Wynn and Dr. Hermann Hauser, one of Europe's best-known technologists and a longtime Cambridge-area entrepreneur.

"The technology base in the U.K. has always been world-class. In fact, U.K.-based entrepreneurs have been very successful recently in delivering their products and services to a global market," said Hauser, the founder of several local technology firms including Acorn Computer PLC and Advanced Research Machines Ltd. "The goal of Amadeus I, however, will be to support those start-up firms in the early stage when fund-raising and networking with global players is essential but much more difficult."

"The success of places like Silicon Valley results from strong links between universities, industry research groups and new technology companies," Myhrvold added. "Great work doesn't just happen in isolation - it happens through the interchange of ideas across a technological community, including the vital role played by start-up companies. We believe our investment in local technology companies will complement the Cambridge lab by stimulating our work there and will also allow us to reap an economic return when these firms succeed."

Cambridge University has been an internationally respected center of learning since the 13th century. In this century, Cambridge has been the origin of fundamental advances in nuclear physics, molecular biology and computer science. More than 300 companies and commercial laboratories specializing in computing and advanced technology are concentrated in the area.

The Cambridge Computer Laboratory was founded in 1937 (as the Mathematical Laboratory) for work on mechanical calculators and analog computers. It became involved in digital computing after 1945 under the direction of Professor M.V. Wilkes FRS.