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Microsoft Accused of Squandering Billions On R&D
Julie188 writes "Even as Microsoft celebrates its 10,000th patent, angry shareholders are starting to speak out against what they say is the squandering of billions of dollars on pointless R&D projects. The 10,000th patent covers a technology that allows a device to associate data with objects placed on its surface, and is likely eventually to become part of the Surface table PC. But shareholders are fed up with the $8 billion annually spent. Said one, 'I believe Bill Gates is a charlatan because what he has said, implied, promised to shareholders and stakeholders and all of these visionary things that he mumbles and jumbles about and doesn't make reality of. MS is spending billions of dollars on R&D. Where is the return on investment?' In contrast, Apple had almost the same revenue gains as Microsoft while spending one-tenth as much."
Why complain about what Bill Gates is saying? The last I saw he wasn't in charge any more. If you must complain about what the head of Microsoft is doing, complain about the chairs flying out of Steve Balmer's office.
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When a company cannot capitalize on its R&D spending, shareholders insist on cutbacks, and the company eventually falls behind and becomes irrelevant.
Since Mr. Gates owns so much of MS, I personally doubt this will happen, but if MS concedes and then begins to cut back on R&D, I'll start to believe those that say that the days of MS are numbered.
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
It seems that MS has managed to work itself into a stalemate. On one hand it must keep evolving and changing to attempt to be better than Linux and Apple, but on the other hand it has to keep regulations into check to not become even more monopolistic. R&D is about the only output that MS can put its profits into to keep regulators at bay and still grow its business.
Taxation is legalized theft, no more, no less.
Maybe if their R&D Budget went more into real products, and less into bullshit patents and lawyers, they'd get a better ROI.
shareholders are stupid
Microsoft spending money on research does seem like a waste, since most of their top stuff is based on stolen ideas anyway. That, or old ideas they hype up into sounding like something people have to buy.
Even as Microsoft celebrates its 10,000th patent, angry shareholders are starting to speak out against what they say is the squandering of billions of dollars on pointless R&D projects.
Investors know that sometimes things won't pay out. These are the whiny little 10%-return-no-risk assholes who sue when a CEO doesn't start layoffs ASAP to pump up the stock price.
Here's news for you: sometimes weird investments pay off in radically unforeseeable ways. If you're the kind of jackass who dismissed the idea because we already had vacuum tubes, then you're the same kind who thinks modern R&D is a waste of money.
As much as I dislove Microsoft, I'm glad they're doing this stuff. Apparently they understand the importance even if a few short term profit-takers are too stupid to see it.
Dewey, what part of this looks like authorities should be involved?
This has less to do with Bill Gates mumbling and jumbling and more to do with the stock market tumbling and tumbling.
People who bite the hand that feeds them usually lick the boot that kicks them
one of the things that dragged Apple down in the 90s? Sharply cutting R&D spending, cutting useless projects and focusing on the core business were some of the things that helped bring them back from almost being a footnote to history. Hard to imagine Microsoft being in the same situation.
10,000 patents are there to control MS competitors
Windows Vista?
Wisest is he who knows he does not know.
The simple answer is you can't "manage" or plan innovation. A reasonable plan would be to hire a bunch of hackers, preferably ones seen at work at 2 AM, give them each a private office and a $30,000 yearly budget for gadgetry, and a mandate to do something fun and maybe useful. And that's it.
Of course no manager would allow this, so that might explain the paucity of results.
Bell Labs, Xerox PARC, IBM's various research labs, 3M's research and others have all generated wonderful new things from their basic research. Google is just one company that encourages employees to spend a portion of their work time on personal research projects.
And now as we bemoan the "next-quarter" mentality of corporate officers and the decimation of basic research, along comes this bunch.
If corporations can't do basic research for fear of being sued, we might as well just pack up our remaining industry and ship it overseas right now.
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
Most of Apple's "R&D" is spent on "D"; there is very little actual research coming out of Apple, by any objective measure. Apple just takes other people's badly packaged good ideas and sticks them into shiny white plastic packages, writing patents along the way.
Unlike other big companies, Apple doesn't even give research grants to academia in any significant quantity (they just charge an arm and a leg for their machines).
If all high tech companies were as stingy as Apple, academia and computer science research would be in big trouble.
Who wants his payoff NOW.
Go back to day trading, moron.
...we will see a future slashdot article spinning it as MS failing to see the long-term possibilities of basic research and a call for government funding to counter the short-sighted capitalists.
MS just can't win around here.
And nice way to finish the editorial malpractice with an Apple tack on.
This promises to be a page churner.
He who confuses patents with innovation ends up a sour investor.
I say MS should of got rid of the used car salesman 5 years ago.
I believe that this is the main reason that google did not want to have shareholders that are looking at the next quarter instead of coming up with ideas that are not profitable at the moment but move technology ahead and will be profitable in the future.
Stay tuned for new sig...
Sounds like Microsoft now has its fair share of shareholders with such a short-sighted vision that they are only interested in short-term profit at the expense of long-term growth. As hundreds of companies have discovered... The "democratic" approach of shareholding has its drawbacks. O_o
#fuckbeta #iamslashdot #dicemustdie
I, for one, think all that money spent on Microsoft Bob and Microsoft Songsmith was money well spent!
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Microsoft have an R&D budget?
Deleted
Unlike Apple, MS has to invest heavy in R&D because unlike Apple, they don't opperate like a consumer hardware company. Secondly, MS is growing stagnant in the operating system market, because the OS has become ubiquitious, and they have regulators scruitinizing everything they plan to do with their OS offering. Thirdly, if MS does millions in R&D, and their competitors or FOSS can take that and produce a free or cheaper interoperable product, their consumer/desktop software lines are threatened.
MS is moving to the edge of bubble, they need to either realize that they are becoming the next IBM and begin to move away from the desktop market into server/solutions development; or begin to become more of a consumer electronics company, which would require creating "good" consumer electronics and be competitive in that market, not use it as a loss-leader to harm their competitors or further intrench their Windows position. Desktop computing in the past 3-4 years has offered very little that is groundbreaking for the average user, and the best-of-the best in '01 is still good enough for most people. PC manufacturers aren't seeing major growth, only sales in "back-to-school" periods where students become first time buyers rather than using mom & dads aging box, or replacement when existing boxes fail; which more and more consumers and companies are working to reduce.
In a strapped market, where people are much more willing part with hard earned dollars for 6 more inches on their screen with HD more than chips 400MHz faster (but feel slower on bloated software), MS needs to find a new market that they can win, and win big in; or they are going to see their share decreasing.
Forgive my spelling from time to time. I'm often posting during short breaks.
In agreement is shareholder Mike McDonald. McDonald owns 118,000 shares of Microsoft, bought in 2000 at an average price of $36 share (adjusted for splits and dividend payouts).
118K shares huh? Well, that's certainly a lot of money to me and probably most people reading this, but considering the fact that 8.89BILLION shares are outstanding, Bill Gates owns ~766MM, institutions (which are generally very passive owners) own over a billion shares, and mutual funds (mostly owned indirectly by you and me through 401k plans - also very passive owners) own a substantial amount, I'm thinking MS is not too worried about this.
Personally, I'm a little more concerned with the bank stocks I own (a small pittance of, also through my 401k) and what they're doing. If there's a fight to be picked on Wall Street these days, it's with the management at banks which is currently raping us for our money, not with a company that is unsuccessfully trying to conduct R&D.
If you dislike where MS is going so much, don't be an idiot and complain that they should stop their R&D... just sell your stock! If I've got a problem with the banks insisting on hundreds of billions of dollars AND billions in bonuses, THAT'S a problem worth complaining about.
If you can read this... 01110101 01110010 00100000 01100001 00100000 01100111 01100101 01100101 01101011
MSR (Microsoft Research) is considered in the computer science academic and scientific cycles as one of the more prolific scientific/academic institutes. And I give Microsoft credit for that.
Here's news for you: sometimes weird investments pay off in radically unforeseeable ways. If you're the kind of jackass who dismissed the idea because we already had vacuum tubes, then you're the same kind who thinks modern R&D is a waste of money.
Yes, but the truth is, all that money that M$ has been spending HAS pretty much been a waste. Their search engine still sucks, their software interfaces are still "clicky" and often counter-intuitive, they do their best to hide many of their "innovations" (MS Bob, anyone?) and the results of their research are often simply laughable.
Say what you want to, but for some reason, all the money being spent is being spent on "innovations" with little potential to change much of anything, and are usually a half-baked extension of already obvious trends.
Seriously. Name *anything* that they've spent the big buxorz on that has been particularly revolutionary. This 10,000th patent is par for the course. A table that attaches data to objects placed on it. Wo0t!
As an investor myself, I don't mind paying for long-term investment, but this is just stupid. There's something basically lacking in this R&D culture. It's neither "pure" (think Bell Labs during the 70's) nor "product oriented" (think Apple, today) but rather a hideous mix somewhere in the middle.
I have no problem with your religion until you decide it's reason to deprive others of the truth.
That is NOT the question.
The question should be, are MS shareholders getting value for money from the R&D ?
And frankly, I'm not seeing anything recent that looks like it was worth $8bn.
For sure, some research will probably show long-term benefits, but at least some of it must start to show benefits around now; after all, this is not the first year that there has been heavy R&D investment. Where are the cool things to show for it that improve our lives.
Or is "Touch" it, really, billions for "Touch" ? My dog could have developed something better than that for only $4bn a year.
I suggest M$ give all their money to the guy who does the tricks with the Wii controllers.
Or to my dog.
Nullius in verba
Shoulve been on slashdot a while ago....
You see, we already knew they were taking you for a ride. Ah, but no, out you were believing the all-american microsoft of innovation (Microsoft has NEVER been an innovator.... EVER.... EEEEVEEEEERRRRR).
So, you get what you deserve.
NO SIG
For software companies, not just Microsoft, there is almost no cost associated with manufacturing and distribution. The cost of developing the software, however, is real and is accrued before the software ships, hence it is accounted for as "Research and Development." Microsoft's "billions of dollars" of R&D is really Microsoft's labor costs -- the programmers who write the code. I suspect that actual real research is a small portion of that sum.
Back in the late 1990s and earlier Microsoft's business plan was much simpler: "Windows Everywhere" was the motto and battle cry. Once the stock peaked and Windows had long hit saturation in the big computer markets things became more complicated. That was right around Gates handed things over to Ballmer.
However, that doesn't excuse Ballmer for the massive failure of leadership and execution during his tenure.
The 8+ billion dollar Xbox fiasco.
The mind bogglingly poor execution of the search team
The total flop of the Zune
The equally mind bogglingly poor result of MSN/online
People have described Ballmer having created a "Culture of Failure" at Microsoft. A culture that embraces throwing billions of dollars at a bad project of idea over a million dollars at an equally bad project or idea.
Ballmer seems to have a business plan that is simply nothing more than to "Kick Ass".
The hit to the Windows profits have been a wake up call to everyone at Microsoft. The days of feeling like Windows and Office would be an never ending flow of cash to throw at anything and everything are over.
The cuts we've seen so far are nothing. Ballmer is still of the mindset of trying to cut as little as possible to appease the Street. Until he is gone Microsoft will continue to flounder and slide sideways to lower.
Loser products like the Zune hardware are on the way out. The Xbox fiasco is most likely next to get the axe. Search and the online services messes need to be given a short timeline to get their act together or be axed.
Microsoft has really got their shit together with the security and stability of Windows. A Microsoft with a visionary and competent leader could be a giant nightmare for Linux and Apple.
1. Find a company who's CEO you believe to be a "charlatan who wastes billions on pointless projects."
2. Invest heavily.
From TFA:
Dude! You loaded up on the stock of a company whose products you don't even like, and watched it lose half its value without liquidating your position, and you're blaming Bill Gates for your problems???
Your god may be dead, but mine aren't!
"U.S. Patent No. 7,479,950 covers a technology that lets users place objects on a surface and have them associated with data or media stored on the computer's hard drive. A user could place a set of car keys on the surface and the computer could bring up that person's schedule or list of favorite TV shows airing that night."
This is just nothing less than unctuous BULLSHIT. How is this different from wi-fi and other tags on inventory equipment (think: Walmart, Borders, and convenience stores moving, tracking, and shipping products...) moving from shelf or bin or aisle and other places. Surely, as the techs scan or wand or key in the wi-fi tag, appropriate menus appear. That they aren't in a HOME shouldn't be a distinction.
Lame-ass awarding of a so-called invention. It should be revoked. There should be a mandatory revocation, with penalties by the day ...
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
Wow. I thought that MS's problems were because of bad management. When I read this, I realize that it goes all the way back to their shareholders.
I prefer the "u" in honour as it seems to be missing these days.
Depending on how Microsoft classifies it's workforce, this may be a simple labeling issue, Many companies call future development work R&D for tax purposes. I believe you can deduct or amortize part of your R&D budget. So, Windows 8 may very well be "R&D".
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If they cutback on R&D then how are they going to know which companies to buy?
A computer once beat me at chess, but it was no match for me at kick boxing. Emo Philips
Get a grip ROI is not an indicator in the real world with disruptive technologies everywhere - get out of the 50's business model. Sure, they need to shore up the waste BUT they are an engineering company and they will do R&D. They still make money so it's the typical greed of the market attempting to screw them over like others before them. Time for MS to buy back the stock - they have plenty of cash.
Apple contributes a ton to real world open source projects. How is that not R? WHat about GCC, or Squirrelfish, or ZeroConf, or launchd or Apache or Webkit or...
You get the picture.
Well actually you don't, but I'll bet you had fun spewing venom at your favorite company.
Just because it's not done by a bunch of guys who never see the real world and never produce real products, does not mean it's not R. R can actually lead to practical things too.
Apple is just smarter in leveraging open source software to get more bang for developer time and money spent.
I'm also not quite sure how you could look at the iPhone and claim Apple does no R (well actually Im very sure, willful blindness being worn on your sleeve and all) but whatever floats your leaky boat.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
At $10,000 apiece, all MSFT has to do is sell 800,000 Surface tables and they've got their money back. I mean who doesn't want a big-ass kiosk in their home.
If their R&D has let them figure out a way to make $10,000 items which have a zero cost of goods, and don't have any marketing or support costs, they've got it made.
"National Security is the chief cause of national insecurity." - Celine's First Law
Microsoft has been shutting down their Xbox game studios over the past three years. They are now down to only three: Rare, Lionhead, and Turn 10. Along with their talk of not releasing new Xbox hardware any time soon it sounds like they are easing out of the console market.
They surely see that they went with the absolutely cheapest console hardware and still lost billions. With no consumer electronics design and manufacturing capabilities of their own there is no reason that they would do any better with yet another try at console hardware. More reliable and better built hardware is going to cost more money. And no one at Microsoft appears to be in any mood to continue spending billions on products that are doing nothing for Microsoft as a whole.
complain about the chairs flying out of Microsoft's aerospace & aviation lab.
Fixed.
There's a reason that department sprung up out of nowhere. Who doesn't want a flying chair?
The 10,000th patent covers a technology that allows a device to associate data with objects placed on its surface, and is likely eventually to become part of the Surface table PC.
http://mtg.upf.es/reactable/
Oh yeah...someone already invented a table that associates data with objects placed on it.
Microsoft R&D is there for one purpose - to keep smart people working for Microsoft, and not some other company.
Microsoft really does not care if they are developing a toaster that can come up with a catchy background track for eating your bagel, they don't want the smart people harnessed by other companies.
If you haven't figured it out, that's really why Google is such a threat - because they have figured out how to attract the smart people, while also getting some productive ideas from them to market.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
You should know by now twitter M$ used the money earmarked for "R&D" to intimidate all who resist M$ and non-free software. Anyone who is involved with this deception, including the one or those who was hired by M$ to post under numerous accounts should be arrested and tried for intimidation and fraud.
--
Friends don't help friends install M$ junk
Friends do assist M$ addicted friends in committing suicide.
shareholders seem to forget the risk that they've decided to take to share in the prosperity or ruin of a company.
if you don't like what they're doing with your shareholder money, simply sell your stock, get your money back, and stop complaining.
A bunch of the .NET languages, runtimes, and compiler features originated in or were developed closely with Microsoft Research, and some parts (like F#) were almost wholly developed there.
Although it's not very much liked by Slashdotters, Songsmith has also been relatively successful. Kodu is also getting a reasonable amount of press, and helping to solidify XNA's lead in the education-via-games space.
More generally, they develop prototypes of a lot of ideas that get reimplemented by the "product" side of the company. For example, MSR has been experimenting with adding machine-learning and data-mining features to MS desktop products for years, something that the product group is now starting to do with Excel. Those sorts of things are harder to quantify of course--- did the MSR experiments in that area help the product team at all? Would they have done the same anyway? Hard to say, but in general I think the advantages of having an R&D division in your company are undercounted in these "soft gains" ways, which is one reason that once companies downside their R&D divisions, the product groups stop producing as many new things as well.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Looks a little one-sided, wouldn't you say?
Cut it out, twitter, really.
Mod twitter funny.
You usually don't get to see this kind of schizophrenia outside of the movies. It's actually amusing to watch his paranoid delusions build on themselves, as the AC below (which is clearly twitter, again) shows.
TFA seems to get the distinction, but /.ers should note that at software companies like MS the D part of R&D is everyday product development which is always ongoing. So at MS R&D will always be a major part of overall expenses.
The article argues that MS isn't getting enough return from total R&D spending (which includes product development). People here just need to remember that R&D does not equate to just the R (research) part.
Microsoft Research consistently accounts for approximately 15% of the papers presented at SIGGRAPH every year.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Microsoft have a very successful product and a large market share. This is good, but the market will shrink. When computers can be churned out for $50 a time, people are not going to pay $80 for the OS, and might not be willing to pay that much for Word, if they can get an adequate word processor for free. Right now MS is raking in money from these products but the company needs to be able to survive if people don't want their key products any more. They need to invest and need to hope to stumble on the next big thing.
Apple have done well because they made the iPod and have used that as a springboard for their R&D. Similarly, Google have a large stake in a rapidly expanding market. Comparisons with these companies is pointless
I used to say this few month ago, until I started coming across Vista computers infected with all kinds of exotic trojans and malware. The security model on Windows has gone from complete anarchy to "here's a computer - train it yourself." The burden has been shifted towards the user. That's not progress in my view.
Also, I'm not convinced about Xbox being a fiasco. Out of all the billions they have wasted, this one looks like a winner in the long run. They're one generation away from dominating the high-end console space in an event of one more Sony fuckup with PS3. You could never count Sony out when it comes to massive fuckups.
This is the entire problem with incorporation. If Microsoft were to dissolve their Windows branch and focus entirely on cool things (Zune, Xbox, Silverlight) then the world would be a much better place all around, but instead, they're forced, by legal obligation, to work on making stock prices as high as possible.
Shareholders need to go fuck themselves.
~ C.
If you hire all the talent and have them run in circles for you they won't be off at your competitors doing real work. MS-Research, the new Xerox Parc.
As a [remaining -- for now] Microsoft employee, I can tell you that there is lots of stuff going on here that gets cancelled. Things do not always pan out.
There are probably projects and people that could be cut. MS could probably be more efficient.
Generally, I've seen good technology and near-finished products get killed for political reasons. That work tends not to be completely lost, however. Near-produts tend to have their interesting technologies teased apart, refactored, and re-incorporated into future MS offerings.
However, much as I malign them, I trust the various managers within MSFT to make R&D and strategy decisions over some dipshit that owns 200 shares of MSFT and is irate that he's not seeing '95->'99 era stock price appreciation.
The MSFT stock has been garbage for a long time -- and I am sure I own more of it than the average complainer. Microsoft has always spent money all over the place because real progress takes investment. The company continues to be highly profitable and doesn't appear to need micromanagement from people looking to get rich via stock speculation.
I haven't carefully analyzed the ramifications, but I am at least emotionally drawn towards the idea of MSFT rebuying _all_ of its public stock and telling the market to FOAD.
Last I checked our market cap was down in the $200B range, so I don't think that's a plausible option, given our cash position.
My opinions are my own, and do not necessarily represent those of my employer.
And M$ is sadly lacking in bringing these to market.
I can't imagine them doing a Twitter, can you?
M$ is simply too big and now they can't buy their competition without the anti-trust regulators getting on their ass.
M$'s now in the same position that IBM was in the 'sixties and early seventies.
IBM HAD to change when their stock tanked and their markets dried up.
M$ has got a real problem there in that they're up against open-source and/or free software and yiou can't get cheaper than $0.00
Glad I don't own their stock.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
This is what I see when I read most of your posts:
But then add
why do these people not know MS is giving XP away on netbooks? (operating systems being the most lucrative revenue stream) that this the fastest growing part of the PC market? And their doing this because of open source? That they are in a tough market for entertainment devices? That they need to spend on this so in the future they are not reliant on operating systems and office software? That many of Microsoft successful ventures (office for one) were hard fought victories?
why do these shareholders activists not no these (or care) simple
banks in other words, not happy with mismanaging their own business they wish to control others as well.
Let's see... Internet Explorer has cost Microsoft billions when you go all the way back to 1995. Between antitrust lawsuits, bribes to AOL (a decade ago), legal fees, support costs, a seemingly endless number of security holes, the ActiveX debacle, the "MSVM" settlement, unhappy OEMs who couldn't bundle competing browsers, unhappy customers who have had to deal with malware, continuing to support 4 versions of IE, etc., etc., etc.--I just don't understand why Microsoft didn't pull the plug on IE 5 years ago...
.NET is the only browser-specific technology Microsoft seems to truly employ... If Microsoft would have just partnered with another browser (Firefox, Chrome, Safari, even Netscape, etc.), their bottom line would be much better. IE never drove sales of any other Microsoft product--how many people do you know have said "well, I need to buy a PC with Windows over a Mac because I want IE!" IE just came along for the ride with other Microsoft apps (Windows, Office, Visual Studio, games, etc.) for the sole purpose of killing Netscape... In retrospect, what was the point?
The worst part about it is that
Windows 3.1x calc: 3.11 - 3.10 = 0.00
didn't have anything to do with it?
- Parallel Extensions to .NET
- Surface
- Photosynth
- WorldWide Telescope
I don't know if Parallel Extensions is worth $8 billion, but it's a huge deal and the cornerstone of the ManyCore/Multicore work MS is doing. It's pretty freaking cool. (And the Mono folks have already implemented it...)
"The urge to fly from modern systems, instead of moving through them to even greater, fairer things is, I think, an indi
It's all about culture. Microsoft has a culture of leveraging guaranteed income via a monopoly to steal or buy the technology of other companies. However, at the root they do not have a culture of innovation, and when it comes time to innovate, they just don't seem to know how.
I am by no means a sony fanboi, but please clarify how sony has fucked up massively. i want to know. i already know about the rootkit stuff.
> ther competitor and user hostile stuff into Vista.
[citation needed]
I remember telling someone that I just fundamentally disagreed with buying a stock (in an ongoing company) that paid no dividends, on principle. It meant either I was betting they would change their behavior, or that I assumed I could find someone dumber than I was.
If neither of those are true, I might as well just burn my money. Since the latter implies the guy that sold me the stock is smarter than I am, and the former reminds me far too much of those women that date jerks thinking that they're going to change, I never much cared for either plan.
I wonder whether the guy that said that was a naive way of thinking of stocks ever found anyone dumber than he was.
Just a thought - Pug.
An Invisible Entity of Vast Power whose existence must be taken on faith alone: Liberal Media
Please give your $8B to Apple. THEY will know what to do with it!
Thanks,
Steve
There's a simple solution: stop inventing dumb shit and invent something cool.
Put your money in a bank instead.
Doesn't it make you feel good to know that our freedoms are protected by politicans, lawyers and journalists.
My understanding is that until recently one of the big purposes of MS Research was just prestige, not really product production. MSR has consistently produced a very large amount of academic research in some key areas, e.g. almost always accounting for more than 10% of the papers at SIGGRAPH, year in and year out. Microsoft management was of the opinion that having something like that was useful to their business in indirect ways, even if those SIGGRAPH papers didn't directly lead to deals with CG film companies or anything. Is that true? I have no idea; it's kind of hard to measure intangibles like whether having a prestigious research group attached to your company increased your reputation to the point where it tipped the balance on an important sale or contract.
I think they were also going for the Bell Labs model, where the research group pays for itself if it's left to its own devices and very occasionally invents/patents something big. I have no idea what MSR's patent portfolio is like from a business perspective. Have they licensed any significant percentage of it? More intangibly, what proportion of Microsoft's defensive patent portfolio originated from MSR?
And finally, one of the unofficial purposes of MSR for years was just to hire up everyone so nobody else could. Microsoft had a dominant lead in a number of areas, and one way to protect that is just to deny all your competitors access to talent. Kind of the model Google is currently using (they hardly need 20,000 employees otherwise).
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Microsoft pulled in 51 billion last year. Apple pulled in 24. I wouldn't say those two are "nearly equal".
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"Out of all the billions they have wasted, this one looks like a winner in the long run"
Was that a joke?
They've got a system that:
* The first ever console to have LESS storage space compared to previous gens: PS2,Xbox had 8.5 GB per disc, the 360 only has 7 GB per disc
* The worst console hardware ever created
* The only console in history with graphics hardware so poorly designed that the console is forced to rely on a third party crossplatform engine, the Unreal Engine, for its 'graphical showpiece'
Microsoft has lost almost exactly the same amount of money on the Xbox 360 as they did with the Xbox. And the Xbox 360 is dead in Japan just like the first Xbox. And the Xbox 360 is dead all across mainland Europe just like the Xbox.
And the one thing that the is supposed to justify the pitiful existence of the Xbox platform, to 'own the livingroom,' has been a total failure with BluRay curbstomping HD-DVD right onto the trashheap of history. And digital download continuing to be a tiny and irrelevant niche.
Meanwhile Sony:
* Is now raking in the BluRay royalties
* BluRay is being adopted faster than DVD over VHS
* Selling at a faster rate than the 360 over two years even with being 200 dollars more expensive
* Has 20 some first party development studios all making exclusive PS3 games compared to Microsoft's anemic and shrinking 3 first party studios
* Has incredibly silent and reliable hardware even though they introduced brand new drive tech with the PS3
LOL! You really are a delusional little fanboy...
I mean who doesn't want a big-ass kiosk in their home.
Buy one and use it as a diaper changing table. That's a fitting secondary use for it, don't you think?
They are dominating the high-end console space, with Wii dominating the low-end. The PS3 is a clear 3rd, and will probably not catch up. It might all change with the next generation, though.
It may not be popular or known to common users, but Microsoft Research is actually fairly well known for its work and yields plenty contributions to scientific publications - so it isn't like they aren't doing anything. Here are some random pages from the site.
If anything, it's surprising that more of it doesn't bubble up into consumer products. Maybe it's simply mismanaged or mistrusted by the management?
-- Sig down
Go read the major scientific journals in areas related to computer science or nearby fields, and read the papers from conferences. You'll find plenty coming out of Microsoft, and very little coming out of Apple.
By almost all measures used to rate academic research institutions (papers published, winning major prizes, elections to national academies, etc), MS Research is near or at the top. In fact, even if you look at absolute numbers, rather than per researcher numbers, MS ranks high, which is remarkable.
This is actually fun news. Microsoft's R&D budget is used to develop things like Vista, C#, MS Dogs, etc. The problem is that, rather than work with established standards, Microsoft's anti-competitive work is to create new and non-standard road blocks to interoperability.
Now that vista's ROI was MUCH less than expected and share holders are starting to think twice, maybe Microsoft will think twice about writing a whole NEW computer language and execution environment, and work with the existing vendors.
Nah, that will never happen.
You say that the Xbox fiasco is on its way out. If this its true, MS is completely going to gut their investment in gaming. They've already trashed Ensemble (Age of Empires) and ACES (Flight Sim), two storied and successful PC franchises. Some speculation is that the products released were too niche, but there's no reason to gut popular products that continued to improve over time when they're profitable. Combine these cuts with the abomination that is Games for Windows and DirectX 11's focus on video over gaming, and I have to wonder if MS is able to take any more hits against gaming, which for many power users is the main reason to keep a Windows install around.
"It's the end of the world as we know it, and I feel fine."
I'm by no means a fanboy on either side, but just looking at sales and production costs, Sony must have fucked up somewhere. Where, I do not know. Personally, I'm a PC gamer.
Wow, I didn't know you could troll so obviously. I mean, the PS3 may be winning in some markets, but neither is really a clear victor. I wouldn't proclaim others to be mentally inferior when both opinions are correct.
I'm tired of splitting hairs to find reasons to make Microsoft look bad. This type of submission is equivalent to tabloid shit and doesn't warrant hundreds of comments, even the same comments as last time someone put Microsoft under a microscope.
Good for Apple, bad for Microsoft, let the shareholders figure it out; now throw this submission under idle and let's continue onto better spent time...
The USA is not the world. In other markets around the world the Xbox 360 is in third place. It is quite a fiasco actually.
"Let me get this straight: You think that your client, one of the wealthiest, most powerful men in the world, is secretly a vigilante who spends his nights beating criminals to a pulp with his bare hands. And your plan is to blackmail this person? Good luck." - Lucius Fox
So, is Batman Gates or Balmer?
Yes: in the notoriously xenophobic Japan. In every other market, the PS3 is a distant third.
And even in Japan, the PS3 is losing to the PSP of all things when it comes to market share. The PSP has barely a sliver of the market of the DS. That the Xbox 360 is doing even worse than the PS3 in Japan is solely due to the fact that it's made by an American company.
In every other market, the Wii dominates followed by the Xbox 360. The PS3 may as well not exist outside of Japan.
You gotta spend money to make money that is just the way it is. Also, Apple has no where NEAR the the service/product offering that MS have. There are overlaps in their target audiences but there are also major variations.
http://projectleader.wordpress.com
Ballmer CHAIRS the Board and he might CHAIR the BORED if he hasn't got their unprovided attention...
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
Here's a site which is non-biased, just showing sales information: http://www.vgchartz.com/
It looks like the 360 is pretty far ahead in the U.S. market and about 2 million ahead in the other markets, and then around 2 million behind in Japan. Of course, the Wii is dominating everything.
Since time immemorial, research has been achieved by strong patronage from the rich. Basic research thrives in extreme affluence as there is no great motivation to make the dollar work. MSFT and GOOG have been so wildly successful and that is great for the current generation as they continue to employ smart people with little pressure to come out with products that sell but are only judged by the quality of their research.
It wont last long with either of these Companies, especially with MSFT losing ground to Google the pressure for survival is growing. I think the next set of Companies/entities doing basic research will come from China. They have a huge war chest of resources and are beginning to establish their monopoly.
If they can claim some $10B in "research" (time, labor, materials, marketing, awards, scholarships, grants...) they can deprive "the man" of money "he didn't earn", as if ms HAS earned all the gains it got...
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
R&D is one the most fun jobs that a computer science graduate can have. It's where new ideas are (generally) born and innovations like Surface made. Many hgih-level CS jobs will be lost if MS cuts on R&D spending. And by the way if the shareholders haven't noticed; Microsoft's total revenue from *software* is much higher compared to Apple's.
I salute Microsoft for the billions they spend on R&D. Keep it up. Pure research is a beautiful thing, one never knows what marvel it will produce.
You cant compare the R&D budgets of apple and Microsoft as their product lines are far different.
Microsoft has 1000's of applications across several markets, apple has 100's ( if that ) across a handful of markets.
Its almost like comparing Tesla Motors to GM...
---- Booth was a patriot ----
One tiny Microsoft investor, who admittedly doesn't even like their products, objects to their current strategy. Much, much larger Microsoft investors, such as Bill Gates, disagree with him. Since they own the company and this guy does not, their say wins out.
If he does represent a majority of Microsoft shareholders, he can of course propose a shareholder resolution and try to outvote Bill Gates at the shareholder meeting, or even replace the current MSFT directors with a new slate.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
You should know that Twitter doesn't cite. Apparently you can't cite hallucinations. Who would have thought?
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
"Here's a site which is non-biased, just showing sales information"
Did you actually just write that?
That site is the poster child for fanboy sites. It is a site run by a little kid Xbox fan who used to make up sales numbers on various gaming sites until he go banned for spreading bullshit.
Did you honestly think some little site is able to sample retail data from Asia,North America, and Europe??? Something that large companies can't even manage to do even with the large amounts of money they charge companies just for one single country.
My god are people naive.
Actually, this is accrued from sales data provided by those companies themselves. If it really is so biased, why is it actually showing the PS3 on the graphs picking up while the 360 is falling?
They are dominating the high-end console space, with Wii dominating the low-end. The PS3 is a clear 3rd, and will probably not catch up. It might all change with the next generation, though.
That's a dubious distinction, if they're not making any money by doing so. The number of warranty repairs they've had to make is astounding.
And who cares about high or low-end? A 360 is barely more expensive than a Wii, and should theoretically be capable of everything that the Wii is, if it's a "high-end" machine (it's not, but that doesn't change the fact that neither Sony nor Microsoft have even attempted to capture part of Nintendo's marketshare). From the investor's point of view, the Wii has completely dominated anything that Microsoft or Sony have been able to conjure up.
-- If you try to fail and succeed, which have you done? - Uli's moose
While I agree that they're doing nothing, your argument about prices is flawed. Most of those who bought a Wii are those who will only buy one system, so recent price drops won't affect them, as they already have their one system.
The complaining shareholders don't own enough shares between to even matter. Read the article and compare to major stockholders: http://finance.yahoo.com/q/mh?s=MSFT
My god. I didn't know there were people this gullible.
There is only so much the little kid can inflate 360 sales numbers and deflate PS3 sales. He can't put 360 sales number up that are higher than reported shipment figures. And he can't put up PS3 sales numbers that are so low that it would mean millions and millions of PS3 sitting unsold on store shelves around the world.
It is obviously getting harder and harder for him to inflate 360 sales relative to PS3 sales as the installed base numbers increase. But he tries with the burning fanboy desire. He once in a while screws up and puts up his fabricated sales numbers that have 360 sales greater than 360 shipments or some other obvious mistake. The Other region is where he sticks most of the inflated sales numbers for the 360 since that is the hardest to track region with no single company providing regular sales numbers for the entire region.
And then there are the fabricated software sales numbers that make the hardware sales numbers look reasonable...
Having shut down almost all of their console development studios, and doing massive cost cutting, it looks like Microsoft's plan for the Xbox mess is just to stop wasting any more money on the turd of a product and milk the existing userbase out of the 50 dollar a year online fees for as long as possible.
The idea that Microsoft would spend another 2-3 billion on more Xbox hardware is laughable given what is going on in Redmond right now.
The 360 was supposed to be the console where Microsoft got it right. Staggering to think about just what a train wreck it turned out to be. Eight billion dollars wasted and the system is once again only selling to US and British gamers.
Shut up twitter, you aren't insightful in the slightest, and your delusion doesn't represent reality.
(I especially like how you refer to yourself in the third person).
For a site about things like basic rights, Slashdot users sure do like to censor "dissent".
Despite all the wildly fluctuating sales numbers from various professional and unprofessional sites, I've never seen one that put the PS3 ahead of the 360 in total sales. I don't think the PS3 is a flop; I think we have a competitive race between it and the 360. That's a good thing. But I can't see any reason other than wishful thinking anybody would think it wasn't 3rd place in sales.
wow, it's taken "shareholders" this long to figure out it's all been a sham? Windows is what brings in over 80% of the revenues and billions a blown year after year on money losing ventures and that thing they call R&D. R&D is a really nice black hole to hide and move money around too. I remember a few years back when MSFT cut R&D by 50%( down to ~$3.2billioin from ~$6.4billion ) and magically a bunch of the other divisions showed profits for the first time. A couple of quarters later they were back to losing $100s of millions each.
The whole company is running on the 20 year old monopoly and they don't have any clue how to make a profit outside of Windows. And it sounds like shareholders are finally getting sick of this now that it's been something like 8 years with little value/growth and Vista, well I'm guessing that's pissing them off too. It also doesn't help when little Apple can launch products, v1.0 products I might add, and they are fantastically profitable.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
From an investor's point of view, the PS3 may be well worth it. Even though the sales were a bust and it lost tons of money, it helped shoehorn in Blu-Ray, which might provide a more than sufficient return on investment.
The 360 is, while probably a money sink, still one of Microsoft's best chances at expanding into new markets. The X-Box isn't a sad attempt to break into the market, like the n-gauge. It's a major player in the gaming field.
I chink if you wook at data from outside Japan wou would find that woo very wong.
Said one, 'I believe Bill Gates is a charlatan because...'
An investor said that?
And they believe Bill Gates was a seventh level magic user who magicked them in to investing with him through flim flammery?
Sorry the economy sucks but take some personal responsibility and stop blaming everyone.
If you're going to sit around annoying the shit out of everyone at the watercooler, telling them how you're a really smart investor when the economy's strong... you don't get to whine when it's weak. You took credit for your "decisions" then, they're still your decisions now.
If you were really so incompetent an investor to fall for "a charlatan" you probably shouldn't be investing anyway. And, if you do lose, hopefully the pain will be just sufficient enough to teach you that.
Yeah, but the question is, are they making money on the Xbox? It doesn't matter how many units you sell if you don't make a profit on it.
You brought up Xbox... because they've ONLY lost $5 Billion on that project over 5 years... and they're the leading online platform now. Where's the bang-for-buck out of the other $3 Billion from just ONE YEAR. That's what investors are asking.
I've seen this coming for a while. Now that the "cult of bill" is coming to an end, and the economy is down, investors are going to want some pocket money... i.e. profits. Bill SAT on $40 BILLION dollars CASH for most of a decade... just sat on it or used a little bit for R&D... that's more than the Airline bailout, more than the Auto bailout.. and it was just "mattress money" to Bill.
Clippy does too have a point (two of them, actually). And he makes it with style, too!
they spend $8B on other "money sinks" they've only spent $5B on Xbox over several years... I'd say they did well with that project...investors want to see one of these PER YEAR for the money they're paying out.
Apple was also spending a huge amount of money on R&D during the eighties and nineties, inventing really awesome stuff, but never actually selling anything based on that research. It sounds like Microsoft is doing the same thing.
Microsoft should consider doing what Apple didn't: license the technology to small spinoff companies, with Microsoft owning many of the shares, and let the ideas come to market.
I suspect a lot of the stuff Microsoft is doing doesn't find its way in to products because Microsoft as a corporation doesn't know how to market stuff that may start off as novelties, and doesn't have any interest in trying to do small projects outside the comfortable shell it inhabits. Microsoft is huge and people expect huge projects from it. I also suspect the "Microsoft" name hurts smaller initiatives that analysts and the general tech press don't understand. Handing the smaller things off to start ups would solve these problems, and a few might earn comfortable returns.
The PS3 is not a flop. It's objective was to push Blu Ray ahead. It succeeded: HD DVD is now dead. Now the PS3 has achieved its goal, and can be left to die. Sony, a company that is bleeding money and has stopped growing, can't afford to waste on the PS3 double what Microsoft, a company that's making 18 billion clean each year (out of 60B in sales) and that's beating Sony in that market, is said it can not.
And I'm sure you have some data to back that up, right?
For what it's worth - anyone who goes by anything other than NPD data is a fool. But then again, that wasn't your point, was it?
Those who can, do. Those who can't, sue.
Because HP spent ten-frickin years getting the memristor - and that is about as cool as in gets in fundamental electronics. So yeah, if I owned MS stocks, I wouldn't bitch about money being spent on R&D - its not like the company is on the verge of going under.
They've spent a LOT more than $5 billion on the Xboxen over the past decade or so. More like $25 - $30 billion, last I read. That's a truly staggering sum for a product line that's yet to earn them even a cool billion in profit over the same period.
It's even more embarrassing for Microsoft when you realize the Wii has forced them to cut the price of the Xbox 360 just to remain competitive saleswise - and they're still sliding into 2nd place in this generation for overall sales, in spite of having a year's headstart.
Even worse, Nintendo has been turning a profit on the Wii since very early on in its lifecycle. Microsoft just recently started turning any consistent profits at all on its videogame business, and last I read they're still losing money on every 360 they sell (they have to make it back on the games). In contrast, Nintendo is turning a profit both on their consoles and on the games.
In a lot of ways, I'd say Microsoft is an even bigger loser in this generation of the console wars than Sony. The PS3 is likely to have a longer lifespan in the market than the 360, giving Sony more of a chance to make money off the consoles (and games) in the long run. And by pushing Blu-Ray to some level of success at least Sony stands to make some money off that standard thanks to their enormous PS3 investment. In contrast, Microsoft has nothing to show for the whole Xbox investment besides - finally - an anemic quarterly profit for their gaming division.
Apple's making far more money off of the iPhone than Microsoft's making off of the Xbox, and it cost Apple far less money and took Apple far less time.
I think folks criticizing Microsoft for their R&D investments are on the right track. Microsoft has blown a ton of money on R&D and on trying to get into other markets besides desktop PCs, and much of it has been completely wasted. Several of their competitors have done a far better job, spending a lot less money.
Research is great, but you have to be able to translate that research into products people want to buy (that's the "development" side of R&D). Microsoft risks becoming the next Xerox - a one-trick pony who dominated one market, but who could never translate their extensive R&D efforts into successful products in different markets. Remember, it was Xerox who pretty much invented the modern graphical user interface PCs sport today, along with things like Ethernet and laser printers. Where are they now?
We all know the stories of how wonderful that Xerox PARC was. The failure wasn't the researchers, it was upper managements fault that couldn't see the future. Can you imagine what the world would be like if Xerox marketed all the inventions that came out of PARC?
When the stock was experiencing solid, steady growht - the shareholders didn't complain.
Now that it's not, they are asking harder questions.
This same pattern can be seen in *any* situation involving investors, public and private.
When the money is falling off the trees, nobody asks too many questions.
When it's not, you tighten the belt.
At this point in time, if MS created the best OS "ever put on computers" they'd lose market share a lot faster. Compatibility with current and legacy Windows applications is what differentiates them from others in the marketplace.
If someday Linux or another OS takes a significant bite out of Windows market share, you might see a new non-legacy OS from MS, but not yet.
With the 360 now selling for less than the Wii, it's hard to justify calling the XBox "high-end" and the Wii "low-end". The Wii is dominating, period. The XBox has a clear lead in the hardcore gamer niche, and the PS3 is losing.
As much as I think MS charges too much for its operating systems, and a lot of its hardware costs more than it's worth... The fact is Apple hasn't been doing much to innovate on ANYTHING except maybe the friggin iPod in a very long time so there isn't as much money being put into R&D, unlike MS who try to release a new OS like every 2-3 years now and have a game console, besides hundreds of computer peripherals. Put that together with the OVERWHELMINGLY UNREASONABLE PRICETAGS Apple puts on EVERYTHING, and you can see where the difference comes from.
Seriously. The price of an Apple computer makes an Alienware gaming rig with Windows Vista Ultimate Mega Double-Shot BBQ Raptorclaw w/Cheese 128-bit Limited Super Special Edition seem reasonable.
For the record, I hate Vista. All my machines run XP x64, and yes I paid for the licenses. Also, my first computer was an Apple II, my second was a Macintosh, and I like Mac OS. Plus I am a graphic designer. So I would say this is a fairly reality-based opinion of someone who could go either way on the matter.
Friend: "The NIC is misconfigured..." Me: "No prob, I'll just telnet in and fix it." *Silence*
THis is like comparing Oranges to Apple. Microsoft does a lot of their own R&D, while Apple just pays people to do it for them. Microsoft makes more than 10x what Apple does, and did 10x the amount of R&D. So what if this year Apple made a big improvement in their profits--it's not going to happen if they keep putting out the same old system from 10 years ago. People bought iPods and iPhones because they are new and they did enough R&D to make sure it works pretty well. Nobody likes Vista because it's basically just XP with some window dressing. If they cut the R&D what are they going to do, release another XP year after year?
Apple changed their name. It used to be Apple Computer Inc. Now it's Apple Inc. That makes it shorter, more succinct, everyone knows they make Computers so it doesn't matter that the computer word is'nt in the title, and they have this totally way-cool factor that applies to all their awesome products. (Yes, I am one of those intelligent people who will buy anything if it is shiny and made by Apple, and I'm proud of it.) Microsoft needs to follow Apple's lead. Their name sounds too much boring businesslike and nobody wants to think of boring business like when there is something cool and hip. Just look at the recent Election. There was John McCain. Boring, businesslike, all kinds of mumbo jumbo about budgets and boring crap like that. Nobody cares about nonsense like that. And then there was Obama, hip, cool, popular. McCain is like Microsoft. Hell their name starts with the same letter. Obama is like Apple. They should have done a I'm a Mac and I'm a PC commercial together. It would have been awesome. Who the hell do you think will win the election? I do'nt know about you but I betcha Barack W. Obama is gonna win. And he did. So what Microsoft needs to do is to change from the image of boring and businesslike to the image of really really cool. And the first thing they need to do is chuck the name and get a better one. They should change their name from Microsoft Corporation to Fun Corporation. They'll sell so many computers they won't know what to do with all the money. And Bill Gate should come back to manage it. He's way popular.
Reading the comments on this board, you would think questioning R&D spending is like being against motherhood.
For all of those who just think it's "just worth it", I'd point you to the debacle that Lucent became or the current state of NASA.
Last i checked he's not in power any more.
That's cool, and doesn't qualify as 'dumb shit' because it at least has some real-world applications.
Those using pirated Tinysoft signatures(TM) are a real threat to society and should all be thrown in jail.
The faux investors are complaining about the faux research. Most of the comments here point out is that MS doesn't do more than mimic existing products and projects and pawn that off as research.
What isn't mentioned yet is that checking the SEC filings, you can see that "research" appeared as a major item about the same time that public ridicule caused marketing to be spread out and stopped from being the major line item.
MS is to computers what Enron was to energy.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
I'm seriously tempted to actually try out Songsmith... just to see how good it is at coming up with tracks to match the chord progression I put into it. As a Linux user... I'm horrified at the prospect of having yet another reason not to delete the only windows install I still have... and usually, it's a music app that's forcing me to keep it...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
The world is not the United States. I totally doubt Xbox beats PS3 in Asia and Europe.
R&D is a code name for Bill Gates' and Ballmers' checking account.
""here's a computer - train it yourself." The burden has been shifted towards the user. That's not progress in my view." In my view, that IS progress. The real progress will be realized when more than 20% of computer owners realize that accepting other people's word for their security is just plain STUPID!! People need to study and understand not that Windows is insecure, but WHY Windows is insecure. And, even on Windows, operator stupidity is the most common reason.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
I'm not normally one to speak up for Bill Gates or Microsoft, both of which I have a long habit of despising (although I think mr Gates appears more sympathetic since he left MS). However, I have always been in favour of doing basic research - without people being willing to "squander" time and resources on finding out about things that give no immediate return on investments, we wouldn't have most of the things we take for granted now: computers, radio, TV, cars, etc etc etc. In fact, most of what we consider human were once a waste of time, people fiddling idly with things they didn't need. Who knows, maybe once somebody was playing with the smouldering remains of a lightning stricken tree and his mates went "Why are you wasting your time on that nonsense, do you think you can eat it? Hur, hur, hur".
I don't praise BG much, but I will now. Bill has a sense of history, a sense of obligation, and a recognition that plowing money into the community is A Good Thing. I never cared for the OS, but I was impressed with Encarta and some of the music-related projects.
A True Geek isn't impressed with profits all that much. What matters is trying something cool, discovering something cool, contributing to the state-of-the-art. Pushing the envelope. Once you've connected with The Source, all the rest exists ONLY for that purpose.
"You must try to forget all you have learned. You must begin to dream." -- Sherwood Anderson
but if MS concedes and then begins to cut back on R&D
This will probably result in cut backs in Singularity's development budget. The only hope that Microsoft had to bring a decent new kernel to its line of OSes.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
that Bill Gates is a charlatan. No news there for me.
The question of the shareholders should not be wether MS should invest into R&D or not - but why they are so bad in materializing on it.
...
Of course I do not have an oversight on all the projects. But I think that very many of the research that is going on at Microsoft Reseaerch is very interesting and could be fun or even useful in the future.
Examples: featured here on slashdot there was Songsmith ( http://research.microsoft.com/en-us/um/redmond/projects/songsmith/index.html ). And there are many others, just look at http://research.microsoft.com./
MS has a long tradition in missing out oportunities. Because they are big and they follow a monopolist's strategy: that is to wait and see, look out for the profitable markets - then step in.
I keep telling the example of the impressive and really useful technology of RemoteScripting (although I do not know if it came from MS Research!). It was years out before the market understood the power of it.
At that time I had several clients who refused to use it, becaue it was proprietory MS (non-standard) and almost completely unknown in the industry.
Today it has become the underlying technology for something everybody knows: Ajax.
If MS had supported and promoted RemoteScripting
you get the point.
how IT is changing the world - http://max.zamorsky.name
A bloated monopoly, swimming in too much easy money; devolving from the meritocracy that got it where it is to a cumbersome bureaucracy -- makes bloated unoriginal software products by process of bloated and awkward bureaucratic committee design; and applies a concomitant approach to research, development and it's application. We've never seen anything like this before... ^_^
Microsoft's biggest money sinks are their attempts to get into businesses where they don't have the monopoly leverage. They'll never break even on Xbox, Zune, or their half-assed Google knock-off. MS needs to come to terms with the fact that they are not a growth company, and they never will be again.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
You left out the Longhorn debacle, which is the single most expensive software project failure in history. They were about 12 billion dollars down the hole when they tossed it and restarted from the Windows Server 2003 code base.
The largest one before that, AFAIK was IBM's "Office Vision", 400 million spent, nada delivered.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I like your point about comparing Xerox and Microsoft.
Xerox is still around number 100 in the Fortune 500 listing. Strangely they sell laser printers (very good colour ones if you ask me). That's not too bad.
The lesson here is that Xerox had gold on their hand and didn't realize it, because their management didn't know how to recognize truly innovative advances with products potential.
I would hope that the Microsoft execs all know about Xerox mismanagement of technology. It may be that Microsoft research is mishandled in a different way. I know for certain that some really interesting projects are going on inside Microsoft, involving computer vision for example. However this may simply not be mature enough.
I think Microsoft research is very advanced in some areas and that it will take time before it delivers.
I agree, these decisions make no sense at all.
http://research.microsoft.com/ shows Service Unavailable. Was it slashdotted?
Back when Amdhal and Hitachi were nipping at IBM heels, the antitrust lawyers were snapping at their faces and Selectrics were still being made and sold, IBM had the System 360 to fall back on.
They could use it as a springboard for their eventual come back after they had changed their business model. But the 360 architecture has been there throughout.
M$ has the X-Box. (Which, ironically, uses IBM's POWER architecture chips.)
M$ has nowhere to go.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
The US is toast technologically because no one, not government, not shareholders, wants to pay for pure R&D. The US is toast economically because shareholders and directors feud and compromise on the worst decisions while grabbing money on both sides (and the shareholders lose out anyway because directors get first grab).
Get pissed at companies for stealing money. Get pissed at how M$ does stock options (from a shareholder perspective). Get pissed that M$ has $40 billion that they use just to threaten competitors that they could give out in dividends. Let them do whatever they want in terms of R&D, XBOX or no XBOX (betting against Bill Gates obtaining a monopoly position is pretty dumb, unfortunately).
You got me into this! You were the ideologue! I'm only a poor assassin! - Twenty evocations, Bruce Sterling
You know, I was thinking much along the same lines. Go to court and tell them, "yeah, some of the R&D won't pay off, but the ones whic do allowed us to make X, Y and Z, and earn royalties from licensing W to other." Then I remembered it's Microsoft. I can just see it,
"Your honour, ladies and gentlemen of the jury, may I draw your attention to exhibit 1: without an R&D budget we couldn't have made the Zune. Erm, ok, so its market segment imploded to nearly zero during the Christmas period, but we couldn't have made it without R&D."
"Then we have our continued investment in expanding and improving our search engine business, so maybe one day it won't get its arse handed to it by Google that hard. In fact, I can sense a Google-killer coming. Step 3 in that business plan is that either an advanced extraterestrial civilization hands over their search engine, or the whole Google has a heart attack when we're around so we can claim the kill. Then one day maybe we can sell advertisments too and actually make an income out of it. But let's not get that far ahead of us."
"We have invested heavily in developing a state of the art DRM that will allow us to own the digital media market... at a time where DRM is producing more and more of an allergic reaction in the market, and the major media labels are experimenting with dropping DRM entirely. We think that the incompatible DRM and the 'plays for sure' thing not actually playing even on previous versions of itself are what helped kill the Zune, come to think of it."
"We have invested millions in the newest version of Internet Explorer, so, umm, it could continue to slowly lose market share to Mozilla and Opera. But without R&D, we wouldn't have had the new stuff in it. Ok, so it's a toolbar and browser tabs. You don't think that Mozilla's toolbar and tabs copied themselves into our product, do you? That's what we need R&D for."
"Then it's our R&D which produced such technologies as .Net and C#. Ok, so it just made Vista more bloated and everyone uses Mono for it anyway, but we think we at least managed to piss off Sun a little. And don't pay attention to claims that it just ripped off Java. If you'll look at the next exhibit, a simple C# program and its Java equivalent... you'll notice two extra curly braces per class and a typo in a keyword... err... I mean a new highly-innovative keyword. Clearly such visionary changes wouldn't happen without billions invested in R&D."
"We have also improved our Games For Windows brand name, and strengthened recognition of that brand, via innovative improvements that our talented R&D teams have produced. For example in Fallout 3 it made the game randomly crash when starting or exitting, and needed an extra patch just to fix that. It also created a demand for hacks to remove it from the victim... err... customer's computers. I think I'm not exaggerating when I say that now everyone knows about Games For Windows. Our data mining the web with our search engine has shown that nowadays the phrase Games For Windows shows up ten times more often than a year ago, though most often after the word 'fuck' or before the word 'sucks', or within the same paragraph as the phrase, 'how do I uninstall it?' You can't buy brand recognition like that with marketing alone."
"Then thanks to years of R&D, we have produced Vista. Umm... Your honour, can you make them stop laughing so I can continue? Thanks... We call Vista a great success, because almost everyone who got it on their computer, then bought Windows XP at a premium just to get a usable computer. So we sold them two operating systems, whereas without Vista they'd have only bought one. Everyone else sued us instead. And some did both."
"And speaking of Vista, our R&D has produced anot
A polar bear is a cartesian bear after a coordinate transform.
Really, there is so much MS promotion masquerading as critique on Slashdot these days, and most of it comes from kdawson.
Microsoft hires a lot of really smart people. The hard cold reality is to retain this people they need to let them do actually interesting things. Since the products are not so interesting they need to let the staff do all this R&D to retain them. Other companies doing more interesting and cutting edge work don't have as much of a problem in this area.
http://www.hawknest.com/
People make the same argument about what they perceive as pointless Science. The fact is it is a great thing that Microsoft is spending that much on R&D. Since when is exploring (or creating) the bleeding edge a bad thing?
I'll try anything once. Twice if it tastes good
And with all this expenditure, they now (within the economic crisis) are trying to make more money back by making all sorts of people swallow some unproven facts.... here
http://it.slashdot.org/article.pl?sid=09/02/11/007216
The problem comes from when M$ feels the crunch and has to resort to even more evil tactics then usual. Open source is actually safer, because the code is open for all to see, who in their right mind (expert opinion here) after finding a flaw, would not wake the community up to it, and help by fixing it, because if he doesn't someone else will, and get the credit for it.... so I don't agree with M$ on this one...they are just strapped for cash...maybe they should stop spending so much on crappy ideas, and more on reorganization of the company infrastructure.
From your description they aren't blowing money on R&D. They're unable to execute on the results of their R&D. Sounds like they need more visionary management, not less R&D.
Zune isn't doing well, unfortunately, but it's a good product. XBox being a fiasco though? It's posed to be the #1 console this time around. The PS3 is much more expensive, and the Wii can't get good games. Personally I'll take the PS3... but that doesn't seem to be where the market is going.
If I were an investor I'd be satisfied with knowing it was > 10%, how much bigger is gravy.
Actually BluRay is one of the reasons I'm picking a PS3 over an Xbox. For the value, you get quite a bit. It will play games AND bluray movies.. when bluray players are only slightly cheaper. With the Xbox, I get a high end machine like the ps3.. but HDDVD is dead.
Your post seems to be just pulling data out of thin air and pushing it as fact. Could you link your sources? I'm unable to find anything close to the figure you give. In fact, Forbes states Microsoft's Xbox, MSN, Wireless and Small Business sections combined only lost $7billion up until around 2007 (http://www.forbes.com/2005/09/12/microsoft-management-software_cz_vm_0913microsoft.html). Up until 2005 the XBox division had lost only $4billion, we'll chuck in an extra billion for good measure for the 2005 - 2006 year and another billion and a half on top as an overestimate for the RROD problem, but at $6.5billion we're still only just around a quarter of your lower bound estimate and not even a quarter of your upper bound, so where are you getting those such seemingly wildly inflated figures???
Of course, you might say that well those figures are only to 2005 and you only gave an extra billion for 2006 (when the XBox 360 R&D was all done, dusted and paid for so probably not even close to that high in reality), so you're wondering why I haven't included anything for post 2006? Well, thats because they've been turning a profit since then.
But then onto the next part, the suggestion that Microsoft is still losing money on consoles, again this is outright false and hasn't been true since about Q3 2006- probably no coincidence it coincides with roughly the time the division started turning a profit too.
Regarding the suggestion that Microsoft is possibly a bigger loser than the PS3, I'm trying to figure out how you can calculate that one. The Xbox 360 is making a bigger profit per console than the PS3, it's around 8 million ahead in sales, it's widening the sales gap and it's shifting around twice as many games per console as the PS3 and the 360 is making more in online services and content. I don't see then how the PS3 has any chance of coming out better.
Whilst as you speculate the PS3 might in theory do longer long term, what are the chances- which console is likely to do best, the one only a few people have, that remains more expensive of the extremely cheap one with the larger library of games? The PS2 fell into the latter category last generation and blitzed the others in sales, so if history is anything to go by it'll be the 360 (or the Wii) this time round. By all other metrics be it hardware cost/sales, game cost/sales coupled with money earned from online services there is absolutely no way the PS3 will be able to come close to the 360's final profits unless the PS3 can be sold at a profit at the same price as the 360, suddenly make up 8 million in sales despite the 360 still shifting more.
Comparing to the likes of the iPhone and the Wii is rather ignorant of the long term goal here. Microsoft wanted to break into the home entertainment area because it believes having a box under the TV is important because that box will be called upon to play games, movies and offer countless other entertainment services within a few years. It wants it's box to do that task just as it's OS is usually sat on people's desktop PCs. Microsoft has been phenomenally successful in ousting Sony's dominance here and entering that market. Nintendo aren't fussed about an all round entertainment system else the Wii would play DVDs, and be able to provide high def. content. Microsoft's goals are bigger long term than just having a gaming system as Nintendo has done and although Nintendo outflanked Microsoft and Sony in terms of the success of their gaming system Nintendo needs to be careful it isn't a one-trick pony and that it can carry on next year. Nintendo has shown a lack of will to go after those wanting high end entertainment- we're talking Gears of War, high definition movies and that sort of thing but both Microsoft and Sony have shown they're interested in Nintendo's market share- Lips, Scene It, Singstar and that sort of thing.
Microsoft is really well positioned, they're where they need to be to achieve their longer term aim but most be cautious not to get complacent like Sony did this time
"Charlatan" is not quite head-on, but closer than "visionary".
Most of the stuff that Bill is "visionarying" about is total bullshit and never happens. Some of the stuff happens, but not by MS, and in a different form. A few of the rest does, in fact, come to pass. Most of that, again, was pretty obvious for anyone with half a brain.
But "charlatan"? Not sure. Hm, he sells stuff that doesn't do what it's advertised as doing, and in addition does have bad side effects. I think "snake-oil seller" might be closer.
Assorted stuff I do sometimes: Lemuria.org
Apple provide significant funding for two important academic projects, LLVM and clang. (I wouldn't be surprised to see clang+llvm supplant gcc on some architectures by 2010.)
http://research.microsoft.com/ has reported service unavailable all day. Did we take them down despite not even linking them? Thanks guys, I needed that site today!
Most insightful commnent on Slashdot in years!!!!
If telephones are outlawed, then only outlaws will have telephones.
HP, ATT (Bell labs), IBM etc.. All of these companies had huge R&D budgets and developed some outstanding technologies and consumer products.
When they reduced the R&D, the outstanding products stopped and the compnaies became sellers of technology. A LJ4, the older HP calculators, CPU's, HP's test equipment (signature analyzers, frequency generators and others were all products from that R&D. Now, HP is just packaging products and existing technology and selling it in cokkie cutter fashion (think Dell).
I don't think the investors are making more money now then they were when R&D was big with these companies.
Apple? Apple's R&D is not ground up technology creation any more either, it is packaging and assembling existing technology with a strong backing of marketing knowledge. Not nearly the same as MS or the above referenced companies.
The bottom dollar rules and investors and CEO's want money NOW, not in two years or ten years. You can NOT have a large R&D budget and expect pay back every quarter. It is a LOOOOONG term investment. The US government and every lower body of government down to your local school board members in the US operates the same way. How can our candidate win an election right now? Say what matters right now. I have NEVER heard a politician talk about ten years or twenty years in the future. It is all about promising and delivering in 4 year increments. There is no long term strategy. We are doomed.
I think folks criticizing Microsoft for their R&D investments are on the right track. Microsoft has blown a ton of money on R&D and on trying to get into other markets besides desktop PCs, and much of it has been completely wasted. Several of their competitors have done a far better job, spending a lot less money.
Research is great, but you have to be able to translate that research into products people want to buy (that's the "development" side of R&D). Microsoft risks becoming the next Xerox - a one-trick pony who dominated one market, but who could never translate their extensive R&D efforts into successful products in different markets. Remember, it was Xerox who pretty much invented the modern graphical user interface PCs sport today, along with things like Ethernet and laser printers. Where are they now?
Don't compare MS to Xerox. MS does do fundamental research. Where they are "wasting" R&D money is in copying others products and trying to enter existing markets. Xerox couldn't get its fundamental research to work selling their products. I don't know if Win N+1 will really make use of their fundamental research, but investors don't mind them spending money there.
The difference is that that MS isn't spending billions creating a video game or MP3/video player industry. They are spending billions trying to enter those markets by spending more money and copying/slightly improving the top products that those industries successfully produce.
It's like if tomorrow MS announced that they were entering the toilet industry. O.k. if it were the 1600s and we didn't have toilets it would be one thing, but now it'd be more like why? That's sort of the feeling that folks are having with MS entering other markets badly are having. Of course they'd not have complaints if MS spent 50M but made 5B in the markets either. (If it were that easy, others would've been trying to do it already.)
You could change toilet industry to renewable energy industry if you wanted a more modern example.
I thought "R&D" was just Microsoft's own internal codename for Apple Computer.
Frankly, I think this is why I think American industry is headed for the toilet. Too many of these imbecile stockholders are more interested in ROI than the company actually producing a good product. Companies are forced into this mindset and as we've seen, no good has come of it.
Compare that to Japanese companies where investors are far more patient. Major Japanese companies are constantly spending money on what can be considered pointless R&D. But in the end they have something to show for it.
How many potentially good products have been killed because investors weren't to wait. Or what was released wasn't particularly good because the product was rushed to market.
The problem isn't the desire to make money, it's that the desire to make money has superseded the desire to make a good product or provide a good service. That's why companies will go to ridiculous lengths to show shareholders they're still viable, but they don't actually do anything to improve their product and ultimately find themselves in the same situation all over again. They're doing little more than delaying the inevitable.
I hear that's more Google (singularity university). Oh, and it doesn't just look cool. It's the only thing and everything.
I still wish they'd been able to buy Yahoo. Now THAT would have efficiently diminished the checkbook-as-weapon strategy MS has perfected over the years.
I'm looking over the wall, and they're looking at me!
Getting rid of CEOs and Boards of Directors is almost impossible. And if you sue them they use company resources to fight you. You can thank the "conservative" SCOTUS for that. They've systematically stripped stockholders (and consumers and private citizens ) of rights these past 10-15 years.
putting the 'B' in LGBTQ+
Dominating the console space is irrlevant to shareholder value. Look at how much money the Xbox program has LOST Microsoft since it began. Billions. The first Xbox NEVER made money, the second was in the red for two years before making money. And the money they're making now is no where near enough to justify the R&D spent getting to this point.
PS, the PS3 is almost selling the same as many units as the 360 at a higher price point. That means it has much higher consumer value.
- Michael T. Babcock (Yes, I blog)
I see a popular misconception rearing its ugly head again. Folks, R&D is not just Research. It's ALL development, testing and program management combined, including project management, vendors, design, UX, localization, etc, etc.
They don't spend $8B a year on just research. One of their problems is that developers represent only a tiny minority of the overall headcount, so most of that sum isn't even spent on "D". Heck, folks at the top of the corporate level ladder (also known as Partners; some of them are worth their weight in rare earth metals, most are completely worthless) rake in over $1B just for themselves.
The PS3 is not that far behind. 7m consoles, which considering 360's 12month US headstart/16month everywhere else headstart, with no other competition, AND a lower pricepoint, is pretty dire for Microsoft.
Sure they will try and spin it to sound great, but the fact they have had to fire-sale the RRP, before they made any kind of "profit" (note the quotes, as in the real world, with $8+ Billion in development losses and RROD, they won't be making any real profit for a VERY long time).
Expect the PS3 to catch up VERY quickly. Last time I looked, it's got all the great exclusives bagged this year, with nothing of interest on the 360 announced. Sure Alan Wake might make an appearance before 2010, but then so will GT5 and God Of War 3 on PS3... But 2009 PS3 has Killzone2, Uncharted2, Heavy Rain, MAG and a tonne more exclusives.,..
And yet for all the raves these research groups generate, it very seldom turned into successful product launches for the parent company
So... companies want IP, but they don't want to do research. They want successful products, but they don't want any failures. It seems very conflicting with reality...
Have Yahoo buy MSN?
I drank what? -- Socrates
It is true that M$ is a much larger company than Apple. However, does any of this come as a surprise. They spend a lot developing their own software but they also spend a lot figuring out how to copy other people's stuff and on how to figure out how to take over smaller innovative companies and make the product their own. Maybe when shareholders start selling the company out from under them they will have to do something. Personally, I know that windows will never go away because we are all too dependent on its software. However, I will open a champagne bottle the day M$ is forced to open source Windows in order for it to survive and they don't have any money left. Do I feel for the people who would lose their jobs? Absolutely, but its M$ fault. As one person said, turn right into the door where the chairs are flailing around. You can start there with why M$ is beginning its own nasty fall.
This is exactly why the US has fallen behind as a "maker of things". Once powerful companies cut cut cut R&D in the name of pure profits and the end result was they coasted on the products that did well... until they could no longer sell them. Then they gut the company and sell it off or merge with another one. It's very sad, very short-term thinking. Same kind of thinking that sunk the US economy, the mortgage fiasco, the Bush war... *sigh*
Actually, Warren Buffet is the richest man in the US. Bill Gates is the third richest man in the world.
Stop Global Warming!
Just say no to irreversible processes!
I've been wondering when investors would finally notice how little Microsoft gets out of their huge R&D investments. I bet they'd do better if they cut everyone's budgets!
Here's what I wrote in 2005:
"... In general, while Microsoft prides itself on the billions it spends each year on research and development, I suspect years from now it will be regarded as a case study on how not to do R&D investment. It's not at all obvious that they have gotten much for their billions. For years they have been touting natural language and usability testing, for example, but there seems to be little to show for it in the first area and still a lot of frustrations at times in the second.
... Ultimately, what Microsoft needs to do is to grow up. Gates and Ballmer have long touted the need to be 'paranoid' in order to survive in the tech industry. This may have worked when Microsoft was small and IBM was the giant, but now that Microsoft is dominant, the idea of a paranoid 800-pound gorilla doesn't bode well for the industry as a whole or for the users.
Like a teenager, Microsoft shows much promise in an industry that is entering a new era of innovation, but it must mature and come to grips with its own limitations. It can't be everything to everyone..."
http://allthings.blogsome.com/2005/09/27/microsoft/
It's caught up with, at most a 8 million unit difference despite being more expensive, having fewer games (and fewer exclusive games) and the 360 being a out a year early.
Sony isn't in that bad of a position considering all of that.
Sony is more popular across the whole globe where as MS' only strong market is the US and if they lose that they're dead.
MS has a bad position of having a console with no real exclusive developers (so once the 3rd parties leave they have nothing) and having help kill of PC gaming by releasing a console which gives people less of a reason to have a Windows PC.
That's why they've attempted to console-ize PC gaming with gaming for Windows but that failed and I think they are afraid that PC gaming will become more browser based and OS neutral as Windows is their big cash cow not the 360. But it's their fault. But moving more resources to the PC side will also hurt the xbox. They've screwed up, imo.
It's even more embarrassing for Microsoft when you realize the Wii has forced them to cut the price of the Xbox 360 just to remain competitive saleswise - and they're still sliding into 2nd place in this generation for overall sales, in spite of having a year's headstart.
They've already slid into second place awhile ago. The Wii has been number 1 in all markets for awhile and even Sony isn't *that* far off from the 360 despite the higher price and fewer games.
Nintendo has always had a good business model where they've always made a profit on the hardware unlike everyone else and as a result even their so called failures made them money. This is why they're not cutting jobs and in fact will be building a new R&D building.
Funny. Everyone I know with a Wii has either an Xbox 360 or a PS3. Predominantly PS3's though. Maybe 60/40.
I thought the whole Taligent project burned through a Billion of IBM's money...
Um, just sell the stock.
Your conversation is onesided because you wrote it yourself. You trolls would like to attribute foul things like that to twitter. When you don't have product, libel your critics, eh? Too bad that won't work to keep your little monopoly.
http://www.youtube.com/watch?v=ruraMRwdaBg
Ballmer talking as if natural user interface will be within the next few years.
Just based off of looks he seems to have no idea what he is talking about.
I hadn't heard of Taligent costing quite that much.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Your post seems to be just pulling data out of thin air and pushing it as fact. Could you link your sources? I'm unable to find anything close to the figure you give
See When Will Microsoft Own Up to the XBox Bomb As of the 1st quarter of 2007 they'd invested over $21 billion and had chalked up over $5 billion in operating losses on their "Home Entertainment" (read XBox) division since 2001.
the suggestion that Microsoft is still losing money on consoles, again this is outright false and hasn't been true since about Q3 2006
Microsoft's HE division turned a small profit starting a year or two ago - I don't know if they've recorded a consistent profit each quarter since - but according to this analysis they still aren't making any money on the consoles themselves (articles back in 2005 indicated MS might have been losing a staggering $500 a console). I guess the hope is they'll make the money back on games, but they'd have to move billions of titles to make up for the $30 billion or so they've dumped into the gaming business. (Don't forget, the "red ring of death" is going to cost them between another $1 to $5 billion, according to published reports. Ouch!)
Regarding the suggestion that Microsoft is possibly a bigger loser than the PS3, I'm trying to figure out how you can calculate that one.
Because Sony successfully used the PS3 to push Blu-Ray as a new standard. Even if they're never able to make much money off the consoles themselves, between the games and Blu-Ray licensing fees, Sony will probably eke out a tiny profit off of the PS3. With its more sophisticated hardware and its ability to be used as a Blu-Ray player (among other things), the PS3 will probably have a longer shelflife than either the 360 or the Wii, giving them more time to recoup their investment.
In contrast, the piddling earnings Microsoft's getting from its Home Entertainment division - a paltry $151 million for the most recent quarter - can't even hope to fill the $30 billion chasm that division has dug for itself over the past decade fighting the console wars. Worse, those reduced HE earnings came on increased HE revenues. What happens if the economy continues to slump and sales actually decline? Looks to me like their Home Entertainment division will promptly plunge back into the red again. Whoops.
Comparing to the likes of the iPhone and the Wii is rather ignorant of the long term goal here. Microsoft wanted to break into the home entertainment area because it believes having a box under the TV is important because that box will be called upon to play games, movies and offer countless other entertainment services within a few years.
If Microsoft does manage to get a box under every TV how do you think that's going to boost their profits?
You might as well ask what's gonna happen if Microsoft discovers a way to turn lead into gold, because they have as much of a chance at that as they do at getting a "box under every TV". Which, when you think about it, is a pretty useless strategy to begin with since that box is a worthless hunk of plastic and silicon without content. And Microsoft doesn't make content.
Does anyone in their right mind think Hollywood is gonna sit back and let the likes of Microsoft control a single point of access to the home (the only way Microsoft's massive investment in consoles could ever hope to pay off)? Good luck with that strategy, Redmond. Heck, even the game developers are smart enough to realize they're better off with two (or more) players competing against one another for dominance in the home.
Beyond that, as time passes it's only going to get easier - and cheaper - to create and market devices that
People always complain that R&D wastes money until they have no new products and the company goes under, or a new product comes out of the R&D department.
In the meantime, "R&D is blowing millions of dollars!"
All that is true, but ... this is Microsoft who is determined to repeat all the mistakes of history without bothering to learn from the (other people's) past.
There are direct parallels of a sort with my camp. AT&T spent plenty on research, even going so far as funding development on experimental OSes like Multics and later in-house development. Unix, which started off as a toy to allow Ken Thompson to play a video game, was so well engineered that its core is still successful 4 decades later. They were so successful that they effectively killed off all the closed-source mini-computer OS competitors.
AT&T was technically and theoretically brilliant, but "they couldn't market eternal life and make a profit". Microsoft is the opposite. They can and did market junk and have it (establish and) take over the desktop.
What return on investment have Microsoft investors gotten on Microsoft's R&D?
Steve's prediction: Unix-derived systems will be around forever. There are too many breeding engineers with taste who can teach programming skills to their offspring. Can you say the same thing about Microsoft Windows, which will die when the company that produces it loses interest or dies?
So many of the old research powerhouses have now fallen (Bell Labs is a mere shadow of its former self ...
You're right and it's going to get a lot worse before it gets better, I'm afraid.
I had a gander at the article you mentioned and it seems to fall into the same trap I suggested you did- the $21billion figure is mere speculation and does not match up with the real facts and figures.
Furthermore, there is an obscure focus on Japan, which whilst previously was an important market for gaming systems, is now in a clear last place as it has gone from largest, to smallest market in terms of money spent on gaming. As such the entire premise that failing in Japan is a bad thing overall is a dated and now incorrect view. This is demonstrated by his insistence that success in Japan is important in terms of success in the world wide market, because the XBox 360 is indeed failing in Japan and has been since release and is yet still has an 8 million unit and still growing lead on the PS3 coupled with over double the amount of software titles still being sold per console. This is clear evidence that Japan simply doesn't matter in terms of global success anymore, because despite the PS3 coming out much better in Japan than the 360, it's come out far worse worldwide than the 360 in terms of both hardware and software sales. He is suggesting that the 360 has an issue attracting developers because it hasn't succeeded in Japan and yet gone are the days where console developers like Sega, Nintendo are the main game developers and are based in Japan, nowadays most game development occurs in the US and Europe, the two markets the 360 is extremely strong in- in fact, in the US the Wii shares only around a 4million unit lead on the 360 so if his suggestion that the region with the most game developers and the region where the console is most successful are linked to best overall success then the 360 is extremely well positioned. Perhaps more importantly again it's worth pointing out the figures don't stack up with the commentary in the article you post- the 360 has many more overall titles, many more AAA titles and many more sales than both the Wii and PS3.
His comments do not match up with the actual facts and figures and his conclusion is based on the now false premise that Japan even matters for overall success.
You now also seem to suggest the RROD problem has cost up to $5bn also, this simply makes no sense, and can't be true based on the fact Microsoft only wrote off around $1bn for the issue. It cannot have cost them more than that else the FTC would've been down on them like a ton of bricks for seriously misleading investors. It's not possible to simply move an extra $4bn to pay to fix a problem like that without someone noticing.
Regardless, the fact you provide a link for $21bn then go on to claim $30bn suggests you have some bias or vested interest in outright twisting the figures. It's hard to think you have anything other than an anti-Microsoft agenda when you do that. Slipping an extra $9bn on the figure you produce from an article that is fundamentally flawed in multiple ways is rather an obscure move. But more importantly, quotes from you like this simply don't even make sense:
"I guess the hope is they'll make the money back on games, but they'd have to move billions of titles to make up for the $30 billion or so they've dumped into the gaming business."
Doesn't make sense why? Well you suggest they need to move billions of titles to make up for $30bn of money spent, simple math tells us that at $60 a title they'd at most have to shift around 1 billion titles, but realistically much less. So if Microsoft was only selling retail titles at $10 a piece whilst making no money of netflix, existing TV/movie downloads, game expansion DLC, themes, arcade titles, community titles, XBox live subscriptions, hardware and other peripherals then you'd be right, but lets face it, it's sheer lunacy to believe that they only sell games for $10 and make no money elsewhere. So even in your over the top worst case scenario Microsoft have to be doing better than you predict or your comments simply don't even make sense.
As the majority of the rest of your post is based on false premis
People have described Ballmer having created a "Culture of Failure" at Microsoft. A culture that embraces throwing billions of dollars at a bad project of idea over a million dollars at an equally bad project or idea.
You had me at "A culture that embraces throwing"
The article does mention IBM Research (buried about halfway through), and I think the comparison is instructive.
Like IBM Research once did, Microsoft Research does a lot of pure academic research, stuff that is on a par with or even superior to fundamental research being done at universities. You never know what benefits you'll accrue from pure research, or what inventions you'll create (and possibly sell off, if you don't develop them in-house).
Like IBM Research, Microsoft Research is being pressured into shrinking, and to produce more "relevant" results. That means converting more discoveries into marketable products.
When I did an internship at IBM Research (Yorktown Heights, though I actually did most of my work at the Hawthorne facility), I was told that about 2% of research made it into products. I was on one of the teams that actually had something that was being turned into a product, and we were actively trying to kill off a competing speech recognition project within the company. Yeah, IBM Research was so big that they had teams actively competing, the idea being that the best of several ideas/approaches would win out, and make for stronger products in the end. Sure, it might seem wasteful up front, but in the long run you corner the market because you've tried all or nearly all approaches and found the best.
Today, IBM is more known as a services company, and doesn't produce nearly the volume of pure research that they used to. Even when I was an intern, IBM was busily dismantling some of the facilities they had just constructed at Yorktown Heights, because the company was in the process of shifting direction toward "results oriented" research. Some state of the art material science and chemistry labs were being dismantled.
IBM Research wasn't generating a lot of bottom-line dollars, but IBM's prestige has fallen even as the company has become more profitable. I suppose this is one of the disadvantages of being beholden to shareholders who value short-term profits over innovation. While I'm no fan of Microsoft, I can see nothing but bad if Microsoft Research gets gutted the way IBM Research was. The intangible beneift to Microsoft, prestige, will evaporate. Microsoft will have a harder time attracting and keeping rockstar talent and luminous minds.
The conversion rate of research to profit-generating products is dismal now, perhaps, but increasing the conversion rate isn't just a function of "trimming the fat" in the organization. There are probably some cultural forces at work at Microsoft that prevent things from transitioning, just as there were at IBM — I was told some truly astonishing stories of discoveries and developments that were way ahead of their time and never made it to market. I would hazard a guess, though, that there's also a lot of hang time between when something is discovered and when we figure out how to do something useful with that discovery. This is the part of the equation that the shareholders are probably missing, and that latency isn't going to magically disappear no matter how much fat you trim.
Apple = creative = hight ROI for R&D but M$ does not foster such a culture and is very inefficient when it comes to R&D.
Your libel is apparent because you wrote it yourself. You M$ trolls would like to attribute foul things like that to twitter. When you don't have product, libel and threatent your critics, eh? Good thing that won't work for M$ keep there little monopoly.
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Friends don't help friends install M$ junk.
Friends do assist M$ addicted friends install M$ junk.