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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."
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.
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...
Bigger Budget != Better Product
This reminds me of an exchange between Thomas Watson of IBM and Seymour Cray of CDC:
"Last week Control data... announced the 6600 system. I understand that in the laboratory developing the system there were only 34 people including the janitor. Of these, 14 are engineers and 4 are programmers.. Contrasting this modest effort with our vast development activities, I fail to understand why we have lost our industry leadership position by letting someone else offer the world's most powerful computer." - Watson
"It seems like Mr. Watson has answered his own question." - Cray
It looks like that might happen again...