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Microsoft Trumps Google, Yahoo! R&D Budgets
Rob writes to mention a Computer Business Review Online article on Microsoft's commitment to out-spend Google and Yahoo! on innovation in the coming year. From the article: "Microsoft Corp will spend over $1bn on R&D just in its MSN unit, for the fiscal year starting in July, chief executive Steve Ballmer told an audience of would-be advertising customers. The money, part of the surprise spending package that recently gave Microsoft's share price its biggest single-day drop in five years, comes as the company struggles to catch up to Yahoo! Inc and Google Inc in the search and online advertising market."
It's nice to know that MS will outspend Yahoo! and Google. However, isn't ROI a more important factor when it comes to things like this? I'm crystal-balling that MS will have the lowest ROI of the three over the next few years.
This guy's the limit!
I guess they're hoping Vista does well then.
Common sense is not so common
As long as google's search engine is better, everyone will search there. On the other hand google's search engine is still far from flawless, so msn could do a nice job if they improved on that. When people will have an actual reason to use MSN search, advertizers will have a reason to get their ads there.
molmod.com - computing tips from a molecular modeling
Most of this R&D money won't be spent in order to make their products better, but to acquire broad-to-the-point-of-meaninglessness patents in order to prevent the competitors making their products better.
if-we-throw-enough-money-at-a-problem-it-will-go-a way department.
The only way to get rid of a temptation is to yield to it.
-Oscar Wilde
We're not smart enough to innovate efficiently, so we're gonna spend gobs and gobs of money buying it! :-)
The less confident you are, the more serious you have to act.
No big surprise there.
That said, I strongly suspect that those working for Microsoft work there for a paycheck -- nothing more, nothing less. Whereas those working for companies like Google love their jobs and really put the effort in -- in ways that can't be measured by hours or even "productivity". But I bet those differences has a very significant impact on the futures of both companies.
Of course, this assumes that their work environments match the reputations of the companies. That may not be a valid assumption.
It would be better if software companies would break out Research from Development. Software ages so quickly that almost all software companies are continuously development new products. Research, however, is a different story. I'm guessing this 'R & D' for MSN is all 'D'.
Outspending doesn't imply out-innovating. The most innovative solutions or ideas often result in (or are produced out of a need for) LESS spending.
Also, I've never considered it "innovation" when the primary business model is to copy other products' features and add a few pretty icons and obvious additions. I have yet to see a NEW idea come from Microsoft. I see a pattern of copying existing ideas, and integrating them closely with the OS so people ignore the original product since a good-enough version comes "free" with the OS.
Why, oh why, didn't I take the Blue Pill?
It is not the number of heads you hire that makes the difference, it's the creativity of each individual that counts. Common view by CEO's is that a certain problem requires so and so many people wich have a given set of buzz words on their CV.
If fact, what you need is to identify the creative (and unique) individuals and it does not matter how many people you have hired unless there is process in place in the company that identifies those individuals and gives them the lead.
May be some of that money be spent on licenses. This is because departments at Microsoft are treated and still treat each other as mini coporations. They bill each other for services.
Is this a case of Microsoft assuming they can throw vast amounts of money at any problem and solve it better than other people?
I mean, nine women can't have a baby in one month. Maybe, just maybe, the reason why Google is out innovating them is they either have smarter people, better development practices, or don't have a bunch of historical baggage of other products they need to slavishly support.
I guess from Microsoft's perspective, it's good to spend money on R&D. Hopefully they'll make better products, and at a minimum they'll probably get to write it off on their taxes.
In the long run though, I wonder if Google won't simply out-do them with fresh thinking, new ways of doing things, and a completely different business model than Microsoft. This may not simply be a matter of keep throwing vast amounts of money at the problem until it becomes easier.
This may require some more fundamental changes.
Lost at C:>. Found at C.
Microsoft throws money at its problems. Like most things in modern America more money usually means more success, right? Bully: I am going to beat you up. Geek: why? Bully: I am bigger than you and I can, that's why! Developers! Isn't Microsoft a software company?
They'll do even better when they start out-thinking their competitors.
They've been outspending Apache for years in the webserver market. What are their respective market shares again?
bang goes my karma... again...
You're on to something, but I don't think it's just the money. While a big influx of capital and corresponding big expansion is almost always hard to pull off, Microsoft has several other factors that squelch a really exploratory culture. First of all, there's the slavish devotion to the Windows platform - everything at Microsoft must ultimately drive revenue on the Windows platform. That's due to their fundamental formulation of attracting developers by building tools around the Windows platform, rather than around some domain of tasks and. Google is not built on browser or not-browser or any language, framework, or toolkit - it's built on search. Unless Windows Live really deeply gets this, R&D dollars will almost certainly fail to change Microsoft's course. Then there's the slavish devotion to backwards compatibility - it definitely keeps their platform alive. And finally, because of their vast visibility (security-wise, DOJ), the culture has evidently become very process-oriented, and it's hard to be exploratory in that environment.
Microsoft has many very, very smart people working for it, but it is fundamentally a business-run company and not an new paradigms company. Their problem is neither lack of money nor lack of smart people to do "R&D" - it's that their leadership has refused to change the fundamental course of the company. Until they do that, "investments" are moot. Probably the easier thing for Microsoft to do would be to try to subtly shift their business model from being the Wal-mart of business computing to being a higher-margin, enterprise-focused software vendor like Oracle or SAP. With their capital and market reach, their odds look rather good in the ongoing consolidation of that space. As long as they try to merge the consumer space with the enterprise space by tying both to the Windows platform, they'll continue to lumber more and more slowly.
One thing some of you folks might want to consider is that this might be the rumbling of the "big bear" waking up finally.
/. is that all things MS are big, stupid, hated, and evil I would encourage people not to count out the big bear just yet.
MS built an empire on some core products. They have rested on those laurels for a while now. They built pretty houses, donated to charity, even threw the occasional chair. Maybe this is them waking up and saying "well what do we want to do now? Hey! Let's actually get back into the serious software business!"
What they have initially to lay out is more capital then most second world nations. You can claim all you want that MS can't buy innovation with money, that they have to find people that "love" their work and all those are at Google or whatever. But I would hold that with deep enough pockets they can start going around to people with big but hard to quantify ideas and say "here's a bucket of money if you think you can make your idea happen".
They might be gearing up to take the Yahoo/Google approach to software and services development and throw several things at the proverbial wall to see what sticks.
As much as the mantra of
I'm a fiscal conservative, it's a pity we don't have a political party anymore