Software giant Microsoft Corp. plans to spend $100 million over the next five years to expand activities and investments at its Israeli research and development centers in the areas of telecom, Internet, security and digital entertainment, including the expansion of its Herzliya Pituah facility. Additionally, Microsoft designated its offices here as a "Strategic R&D center," one of only three in the world outside the US, with the other two being in China and India. "The expansion of the Microsoft-Israel R&D center is an honorable accomplishment and tribute for the State of Israel and its hi-tech industry," said Moshe Lichtman, corporate ice President at Microsoft and president of Microsoft-Israel's R&D center, at Tuesday's expansion announcement held at Microsoft Israel's R&D center in Herzliya Pituah. "This is another indication of the great importance that Microsoft sees in its strategic and R&D activities here in Israel," he added. The expansion plans, approved by Microsoft CEO Steve Ballmer earlier this year, are centered on three large focus areas - a security products group, a telecom products group and PC Health group - with multiple scale and incubation activities included among the operations. Each will be directed by a general manager who will be charged with full responsibility for all of the products developed in it. Currently, Microsoft's R&D center here operates two incubators in the information security sector, with a potential $12 billion market, and one telecom incubator, with a potential market of $16b., and have been assigned with aggressive growth plans for the next 15 months. "We believe that with our expanded operations, we can develop these markets even further," said Lichtman. Over the last 12 months, he noted, the R&D center has grown more than 100% and now has close to 400 employees, with 100 more expected to be added by June 2008. "This is a great opportunity for the local industry and the best minds in Israel to join a local "mini-Microsoft" and take part in shaping the R&D directions of Microsoft and the worldwide market," he pointed out. Lichtman predicted bold undertakings for the R&D center here, saying he was confident that Microsoft Israel's development of new incubators would "lead the strategic efforts of Microsoft."