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IT's Big Spenders
TechEGrl writes "R&D spending increased by 17 percent in 2006, according to a new report on CIO Insight that ranks the top 81 R&D spenders. The spending was mostly targeted at consumer rather than business products, though Microsoft — not surprisingly the biggest spender with an investment of $6.58 billion — did throw significant change at biz apps like the Vista operating system. Investment in Internet search was dominated by Google, which more than doubled its R&D spending in 2006 and far outpaced competitors like Yahoo and eBay."
>biz apps like the Vista operating system
Whoever wrote this nonsense really needs to get off the drugs.
Interestingly Google is tagged under 'Software' rather than 'Internet Services' like Yahoo. Probably a sneak peek at what's to expect.
"Never try to tell everything you know. It may take too short a time."
A lot of people only look at Symantec's home user security products, but a lot of cash from R & D would flow towards some of its enterprise class products like NetBackup, which because of its sheer complexity of development would require a lot of dough.
"Never try to tell everything you know. It may take too short a time."
The text says 'top 81', then the article says 81 businesses were selected and appraised. The text labels Microsoft as being the biggest spender, at $6.58 billion, while also labeling this as 'software' related. The article points out how MS spent big on the latest XBox, which is hardware...someone needs to make up their minds. All-in-all, pretty sloppily written piece. But hey...it's a slow news day, so what the heck.
For a bit of fun perspective, China spent $136 billion on R&D in 2006.
And who could forget the Nov. 2006 study from Booze Allen Hamilton, which stated:
"R&D spending doesn't guarantee business success" - New study reveals that there is no relationship between R&D spending and sales growth, earnings, or shareholder returns.
The Booz Allen Hamilton study "Global Innovation 1000--Money Isn't Everything" analyzed the world's top 1,000 corporate research and development spenders.
It found remarkably that the pace of corporate R&D spending continues to accelerate, as many executives continue to believe that enhanced innovation is required to fuel their future growth.
Spending more doesn't necessarily mean gaining more. The study identified individual success stories. More pointedly it found no discernible statistical relationship between R&D spending levels and nearly all measures of business success, including sales growth, gross profit, operating profit, enterprise profit, market capitalization, or total shareholder return.
Booz Allen Vice President Barry Jaruzelski said: "Successful innovation demands careful coordination and orchestration both internally and externally. How you spend is far more important than how much you spend."
I pfft in your general direction!
Correct me if I'm wrong... but, to me, Research and Development when used together kind of imply creating something new. Meaning that you research an idea and develop a solution. I'm not sure that researching somebody elses solution and then implementing a solution that is the same solution that you researched qualifies for R&D. Research yes, development... Therefore, I disqaulify MS from the list.
[found in an archive of financial/editorial cartoons...]
Sign over open office door reads "Dell Computer R & D" - There is one guy inside the office, feet on desk, leaning back in his chair, reading latest WWF monthly, and another guy leaning in the door, asking a question. Room is empty except for the wrestling fan, the desk and a few cobwebs...
"Hey! Mikey! What's new..?"
Guy in chair shrugs and responds "Nothing right now - just waiting for Apple to release their next Mac..."
3825 million euros was 4530 million dollars back then, of course. Hrm.
$6.58 billion on R&D and they still have dialog boxes like this.
Incredible.
Well, I can't fathom what Microsoft are spending $6.58 billion dollars on, especially with regard to Vista(!?). They're getting ripped off. That's the problem when a company gets that large. It starts to act rather like an organisation in the public sector, with countless departments being needlessly created, consuming inordinate amounts of money for no apparent reason with no clear goals. Microsoft may think R & D spending is the way to get ahead, but I think they've totally ignored the organisational issues involved (or worse, aren't even aware of them).
With regards to Google, I would imagine most of it is related to building tonnes of infrastructure - for reasons which aren't clear to me yet. At least they can legitimately afford it though, and it's not even a huge part of their revenue. That's what really seems to irk Microsoft about Google. They have a reliable revenue stream that isn't even related to directly to software, and isn't something Microsoft can attack like they've done with so many other companies in the past.
The list does make me wonder: what is a technology company? The biggest trigger for this wonder is the strange omission of one Xerox corp. With $922 million of R&D in 2006 it should have been ranked 13 (which seems strangly fitting considering the IP-Address space they have).
I spent $6,000,000,000 and all I got was this loosy OS.
Old COBOL programmers never die. They just code in C.
"did throw significant change at biz apps like the Vista operating system"
I call BS immediately. Nothing to see here, move along.
Conversion Rate Optimisation French / English consultant
Just checking - a trick a lot of companies do is account for patents as R&D costs. But spending on patent monopolies is NOT spending on R&D! Patents SUBSTITUTE for true R&D activity...
Bloathed?
Is that like beloved, but the other way around?
Not saying the article isn't a POS, but the remarks that they spent most on software with the biggest recipient being the Xbox is perfectly accurate.
People need to remember - while Microsoft makes the Xbox they are NOT IN the hardware business. Every aspect of the Xbox's manufacture is outsourced. and it's design is a fairly simple one compared to say the PS3. The most complex part of the Xbox is by far the video chipset which is outsourced in it's entirety.
Sure Microsoft has a lot of input no doubt into the design of things like the CPu and the vieo chopset - but they don't put up most of the R+D costs there it is the manufacturer they outsource to that does. The vast majority of Microsoft's R+D last year in the Xbox was undoubtedly for things like Xbox Live the Xbox OS, and games. Hardware would be a very small portion.
Also, it would be far more interesting if we could determine the R&D spend that has come about from open source software (academics) or is directly spend on open source software (IBM, HP et al).
It is only a hunch, but I think the open source software has enabled, and consumed a massive part of global research and development -- but significantly, is not costed.
rd
At least not here in North America. So far it's been more of the same old Soviet agitprop of "Comrades! This is the Greatest Year Ever - We must continue to sacrifice for the Greater Good and compensation of our Dear Leaders !!!"
Bloathed - Bloated and loathed?
Nice piece of (accidental?) portmanteau-ism! Symantec, is most surely bloathed.
DARPA spent only $3.01 billion. Less on electronics.
They're falling...
You guys might take the piss out of Bill Gates, but MS's reputation as the #1 Big Spender gets him respect from the ladies.
The minute he walks in the joint, they can see he is a man of distinction, a *real* big spender. Some even claim that he's so good looking(!) and so refined that they'd like to let him know what's going on in their mind.
And let me tell you, these girls are fussy; they don't pop their cork for every guy they see.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
I know cisco is near the $1B mark, and I'm sure there are others that I can't think of right now ;)
For example:
Total spending / # of engineers or total employees (better perspective on "big spenders" relative to size of org, so top 10 might not be 10 biggest companies)
Total spending / Gross or net revenue (as others have pointed out, there may not be a direct correlation between it spending and "success")
Percentage of expenditures for internal R&D (e.g. compilers, server farms) vs. bundled/layered products and equipment as part of goods sold (indication of... well, i'm just plain curious about this one)
Question the accuracy or completeness of this list. Cisco who spends an average of 3.2 Billion in R&D a year should have been right in the top 5. Also where are Nortel, Lucent, Juniper, and the Telcos?
source: http://www.ameinfo.com/114768.html
Adeptus
No trees were killed in the making of this post; however, many trillions of electrons were horribly inconvenienced.
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Now the big question is how much of this is applied for actual R&D. You see you can write off a significant amount of money by claiming it as R&D. Money is not a indicator of R&D investment, it only indicates how much was designated R&D spending to avoid paying taxes on it.
Got Code?
If you look at the number of Enterprise companies using NetBackup, I think one would agree it is enterprise software. Yes, it has flaws for large enterprise infrastructure, but I don't think large Fortune 100 companies would be using it extensively if it weren't a useful "enterprise" product. I think the only reason Symantec has any real enterprise presence is because of their purchase of Veritas.
In reality it's a kludgy pile of crap which I personally have had the extensive displeasure of installing, configuring and using in an enterprise environment. It's used primarily because it's cheap and it can tick most of the boxes, whether it actually works adequately or not with respect to the various ticked boxes is an entirely different matter. There are several far superior systems that could conceivably called enterprise class.
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...and no, I have not Read That Fine Article (yet), but still...
Makes me wonder where some other reports are, such as the "Top 17.4 Most Distracting Article Titles", etc.
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There was an article here a few months ago by an ex-MS developer. He was on one of the teams(yes, plural) working on the shutdown menu. I think there were like 40 people working on it for about two years.
So yes, MS is spending plenty, but that doesn't mean they're accomplishing much.
Never let a lack of data get in the way of a good rant.
This whole list is suspect, some firms that are undoubtedly spending more on R&D are excluded, Qualcomm for instance.
So you are trying to tell me, NetBackup users, and I mean real huge organisations, make underground, nuclear-safe vaults, trust their 500+ terabytes of data (not to mention the amount of green they spend in installing and configuring it), trust a product which is not really only an extension of a mediocre product? SAN's are valuable commodities. Nobody purchases Netapp filers, if all they want to do is backup stupid email forwards using mediocre backup software. If Symantec is doing well in this field with competition like Tivoli, Commvault and all, they must be doing something right.
"Never try to tell everything you know. It may take too short a time."
I guess CIO Insight didn't spend enough in R&D to come up with a top 100.
"To be is to do." --Socrates
"To do is to be." -- Aristotle
"Do-Be-Do-Be-Do..." --Sinatra