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Amazon Spent Close To $23B on R&D in 2017, Outpacing Fellow Tech Giants (geekwire.com)

Posted by msmash on from the gotta-invest dept.

Amazon powered its prolific 2017, which saw the release of a cavalcade of new products and services, with $22.6 billion in spending on research and development, tops among U.S. companies. From a report: According to data from FactSet, Google parent Alphabet came in second in R&D spending in 2017 at $16.6 billion, followed by Intel at $13.1 billion, Microsoft at $12.3 billion and Apple at $11.6 billion. Facebook jumped into the top 10, spending $7.8 billion in 2017. One of Amazon's biggest R&D efforts in recent years has been the cashier-less grocery store concept Amazon Go. The company spent 2017 getting the technology, first announced in December 2016, ready for prime time before opening the first location in January. Amazon has invested heavily in its market-leading cloud computing arm, Amazon Web Services. AWS juiced Amazon.

16 of 62 comments (clear)

  1. And yet... by jrnvk · · Score: 2

    ... Google Assistant is still much, much better than Alexa, if you ask me.

  2. Amazon isn't a monopolist by FeelGood314 · · Score: 3, Insightful

    They have some very impressive logistics and brand recognition but almost no barriers to others competing against them. AWS is amazing but there is very little that binds you to using them. aliexpress provides strong competition in their merchandise sales and shopify is changing the way online companies sell, threatening both of them. Amazon earns it sales every quarter and lots of people want those sales. I can see the justification for the high R&D budget.

  3. Wow, the USAF only spends $4B by Anonymous Coward · · Score: 2, Informative

    Interesting that the USAF only spends $4B on R&D within its own laboratory (actually $3B of that might be outsourced.) Maybe all those academics ought to be going for Amazon or Microsoft grants instead of USAF grants.

  4. Juiced by xxxJonBoyxxx · · Score: 2

    >> AWS juiced Amazon.

    AWS squeezed Amazon to release goodness in liquid form and left behind a husk? Odd that "juiced" has come to mean what it has...

    1. Re:Juiced by brianerst · · Score: 2

      Why the quote ended there is a mystery only msmash can know.

      AWS juiced Amazon’s bottom line in 2017, bringing in $17.4 billion in revenue for the year, a 43 percent jump over its total in 2017.

    2. Re: Juiced by Type44Q · · Score: 2

      Except he's right: there are lots of mouthbreathers in the corporate world who lack proper vocabularies and have to resort to slang.

  5. How do you spend $23 Billion? by DalM · · Score: 2

    I am incapable of comprehending this number. I really can't comprehend how they could spend that. Imagine, for a minute, $23 Billion would employ 115,000 people at an average salary and overhead of $200,000. Where the heck are these people? Seattle, I guess. What are they all doing? How many projects are there?

    1. Re:How do you spend $23 Billion? by DontBeAMoran · · Score: 2

      But salaries are usually the most expensive part of most projects.

      --
      #DeleteFacebook
    2. Re:How do you spend $23 Billion? by HarrySquatter · · Score: 2

      Except for the fact that the Washington Post is not part of Amazon?

    3. Re:How do you spend $23 Billion? by LostMonk · · Score: 2

      Part of the reason for that huge number is that Amazon is willing to pay outrageous sums for top talent ... offering double pay and more for highly skilled people to cross over.

    4. Re:How do you spend $23 Billion? by poached · · Score: 2

      I think a lot of it salary. Engineers, QA, etc, all get categorized as R&D at my company for tax credit purposes.

      The equipment they need is also a part of it I think.

  6. Research vs Development Spending by QuietLagoon · · Score: 4, Interesting

    I'd really like to see the spending for Research and the spending for Development reported separately. While both are a form of investment in the future, they have differing reasons for the expenditures. For example, it looks as if Amazon's R&D spending was mostly development, with very little research.

  7. Automation work by rsilvergun · · Score: 2

    lots and lots of it. Amazon is on the forefront of retail automation. Store fronts, warehouses, delivery. You name it. They're being allowed to bleed cash because $23 billion is peanuts compared to a retail future without retail employees...

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:Automation work by Huge_UID · · Score: 2

      Less. They have $3,000 bidets.

  8. But is This All Truly Research and Development? by PastTense · · Score: 2

    Wall Street has the view that losing money is a bad thing while research and development is a good thing. Thus Amazon has a strong incentive to push expenditures which you or I would not consider research or development into that category.

  9. Raw R&D spending isn't a good measure by Solandri · · Score: 2

    You have to divide it by how much revenue the company takes in. Otherwise a small company which spends a large percentage of its income on R&D (e.g. Celgene) can be eclipsed by a huge company which spends a pithy percentage on R&D (e.g. Apple). Pulling numbers from TFA and wikipedia, the top 16 in R&D spending sorted by percentage are:

    1. Celgene - $5.9b R&D spending on $12.973b in revenue, or 45.5%
    2. Qualcomm - $5.5b on $22.291b, or 24.7%
    3. Merck - $9.6b on $40.122b, or 23.9%
    4. Intel - $13.1b on $62.76b, or 20.8%
    5. Facebook - $7.8b on $40.653b, or 19.2%
    6. Amazon - $22.6b on $117.86b, or 19.2%
    7. Oracle - $6.2b on $37.73b, or 16.4%
    8. Alphabet - $16.6b on $110.85b, or 15.0%
    9. Pfizer - $7.6b on $52.546b, or 14.5%
    10. Microsoft - $12.3b on $89.95b, or 13.7%
    11. Johnson & Johnson - $10.4b on $76.45b, or 13.6%
    12. Cisco - $6.1b on $48.005b, or 12.7%
    13. IBM - $5.4b on $79.193b, or 6.8%
    14. Ford - $8.0b on $156.776b, or 5.1%
    15. Apple - $11.6b on $229.234b, or 5.1%
    16. GM - $7.3b on $148.588b, or 4.9%

    The list is also limited to U.S. companies. Generally biotech and pharmaceutical companies top the list, followed by semiconductor companies, then tech companies.