Microsoft Spends $9 Billion On Research, Focuses On Cloud

superapecommando writes to share that Microsoft appears to be going all-out on research in the coming year, with a great focus on the cloud. They're supposedly planning to spend $9.5 billion in R&D; that's $3 billion more than the next-closest tech company. "'Especially in light of the tough difficult macroeconomic times that we're coming out of, we chose to really lean in and double down on our innovation,' [Microsoft COO Kevin] Turner said. Turner contended that Microsoft has more cloud services than any other company, ranging from its consumer email service to hosted enterprise products such as its Dynamics CRM (customer relationship management) system to its Azure cloud operating system. 'We're going to change and reinvent our company around leading in the cloud.'"

Comments

In other words...

[pushing-robot]

"...We're not sure our OS and Office monopoly will last forever, so we'd really like to see if we could actually turn a profit on something else."

Re:In other words...

[alen]

Bill Gates and Steve Ballmer have always said that they knew Windows and Office won't last forever. in the last 10 years they expanded into video games, business software, database servers, general IT servers for IT management, etc.The "cloud" is just a buzzword. few months ago i was reading some article about how someone was deploying servers for some internal project. and the article said they were building out a private cloud.

most of the cloud nonsense is for small businesses. i've helped a few build infrastructure and it's a waste of money buying servers, Windows Server licenses, etc. easier and cheaper to outsource it to Azure, Google or someone else.

for larger businesses hardware is so cheap that it doesn't make sense. We're about to buy a few $15,000 servers when the new Intel CPU's come out. 2 6 core CPU's, 72GB of RAM, 500GB to 1TB of hard drive space, all kinds of monitoring capability, etc for $15,000 each.

i was talking to an IT sales person the other day and he didn't even try to sell an hardware to us. he kept on pushing services. servers are a commodity made in China by little kids. just like ipods. I guess services is the next frontier to try to squeeze some profits

It's _research and development_, not just research

[melted]

Research costs Microsoft about $700M a year, probably less now after the recent belt tightening and layoffs.

R&D means everything that's involved in creating products, including developers, testers, program management, management, non-sales executive pay, etc, etc., and yes, research as well.

Azure looks interesting... But...

[ircmaxell]

Azure is definitely interesting... It's distributed programing model does look to have some advantages. But I think it won't take off like Amazon's has for a few reasons...

First off, there are no computing containers. What I mean by that is you can only run applications on Azure, not whole operating systems. This does have some efficiency gains (in that you don't have an added OS layer in the middle, but it VASTLY increases the tie-in to the system, and prevents you from doing simple things like adding a server template to turn on if your site gets a lot of load.

Second, It requires applications to be custom written for the environment. You can't trivially port a ready-made application from a single server to Azure... While this is good on the efficiency side, it's not good for the weekend warrior or small businesses who want to remain portable and flexible...

Third, it's only on their cloud. You have to trust MS's infrastructure. And you need to trust MS with YOUR data... It's not like amazon's offerings where clones have popped up that are compatible (so you could recreate your own cloud if you wanted to, or use a competitors)... So that locks you in to their system. My guess, is that most sizable companies won't like this at all...

I'm not saying people won't use it. I'm not saying people won't like it. What I am saying is that it is not playing in the same field as the other "Cloud" computing platforms. IF MS opens up Azure (at least in a binary form) where you can install it on your own infrastructure, then it may have a shot. If they allow guest operating systems, then it may have a shot. But without both, I think there's just too much tie-in to be comfortable (and base your business around)...

Disclaimer: This is based on a presentation which I attended by the lead engineer for Azure back in December of 08. Things may have changed since then, but I haven't kept up with it specifically...

Lead or Follow?

[whisper_jeff]

We're going to change and reinvent our company around leading in the cloud.

Going to lead in the cloud? Given that Google, Microsoft's most-direct competitor, has been "in the cloud" for quite some time, as the expertise to innovate and excel, and has the money to ensure they have everything they need, I find that to be a bold prediction founded in whimsy rather than fact. Methinks Microsoft is about four or five years too late to the cloud computing game. Sure, they have the resources to make up a lot of time but they're competing against a company that has similar resources who already has those four or five years (or more) head start.

That said, it is nice to see Microsoft recognizing that the world has changed and making efforts to change with it.

(And, no, that last part wasn't me being a smartass - I'm actually serious. It's a good thing when major corporations recognize the world has changed and adapt accordingly rather than attempting to hold on to a bygone era.)

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[account_deleted]

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Interesting turnaround

[sean_nestor]

From an article in Time magazine, December 29 1995:

Gates is as fearful as he is feared, and these days he worries most about the Internet, Usenet and the World Wide Web, which threaten his software monopoly by shifting the nexus of control from stand-alone computers to the network that connects them. The Internet, by design, has no central operating system that Microsoft or anybody else can patent and license. And its libertarian culture is devoted to open--that is to say, nonproprietary--standards, none of which were set by Microsoft.

Gates moved quickly this year to embrace the Net, although it sometimes seemed he was trying to wrap Microsoft's long arms around it.

I remember reading Gates' book "The Road Ahead" something like seven years ago and being surprised at how wrong he was in his estimation of the impact that mainstream Internet connectivity would have. I wish I could get the exact quotes, but there were a few telling sentences where he comes off pretty clearly as dismissive that net connectivity would become anything more than a cute PC accessory. I'm still not sure if that was his genuine line of reasoning, or of it was just wishful thinking, but I think the point was clear that Microsoft was stacking their chips against net-based services, insisting that locally-run software was going to be the way of the future.

Now they are investing in what Google has already been doing and doing well for years, following their trend of copying other business' models instead of innovating on their own. I'm sure this will work out well for them.

Re:I am from India.

[oldhack]

MS should set that up in Dharamsala, up in the cloudy mountains. I can just imagine the synergy with Tibetan monks humming away.

I know it is an unpopular opinion but

[Raconteur]

cloud computing is a very bad idea. The very same things that Ballmer spoke of as being exciting and profitable are the same ones that terrify me for lots of reasons. I'm not paranoid about privacy (that's gone) but it will get worse, and the possibilities for monopolization, piracy, and loss of data integrity increase exponentially. As a small business, it makes no sense for me to embrace the risk, and as a dinosaur in the digital world, I naturally balk at centralization disguised as convenience.