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Microsoft Patents The Almighty Buck

Microsoft Accused of Squandering Billions On R&D 580

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."
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Microsoft Accused of Squandering Billions On R&D

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  • Bill Gates? (Score:5, Informative)

    by techno-vampire ( 666512 ) on Tuesday February 10, 2009 @05:47PM (#26805291) Homepage
    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.
    • Re:Bill Gates? (Score:5, Informative)

      by mmkkbb ( 816035 ) on Tuesday February 10, 2009 @05:55PM (#26805425) Homepage Journal

      He's still chairman of the board.

      • by DavidR1991 ( 1047748 ) on Tuesday February 10, 2009 @06:12PM (#26805665) Homepage

        Why is this modded funny - he is still chairman of the board!

      • Re: (Score:3, Funny)

        by at_slashdot ( 674436 )

        "He's still chairman of the board."

        I thought Ballmer is the chair man.

      • Re:Bill Gates? (Score:5, Interesting)

        by Teancum ( 67324 ) <robert_horning@@@netzero...net> on Tuesday February 10, 2009 @06:33PM (#26805943) Homepage Journal

        So.... at the next shareholder meeting get rid of the guy!

        Members of the board of directors are directly appointed to their positions (including the chair!) by the shareholders themselves. So in this case, the shareholders have nobody to complain about but themselves.

        They could refer to the company charter, which often has a phrase where the primary objective of the company is "to maximize profits and increase shareholder value". If that is the case for Microsoft (I have no reason to not think so here), the directors are violating a primary tenant of their charter if they spend money frivolously. From this it would be the basis of a lawsuit by violating the basic charter of the company and its legal right to exist.

        BTW, corporate charters don't have to have this clause in their charter, nor is it really necessary with even a for-profit and publicly traded company to be so focused on profits. The problem is that this is so typical that many investors won't put money into a company unless this is explicitly in the charter. Ben and Jerry's Ice Cream is one of the companies I know of that is publicly traded but does not have this in the corporate charter.... but companies like this are an exception.

        • Re:Bill Gates? (Score:5, Insightful)

          by vux984 ( 928602 ) on Tuesday February 10, 2009 @07:16PM (#26806489)

          They could refer to the company charter, which often has a phrase where the primary objective of the company is "to maximize profits and increase shareholder value". If that is the case for Microsoft (I have no reason to not think so here), the directors are violating a primary tenant of their charter if they spend money frivolously. From this it would be the basis of a lawsuit by violating the basic charter of the company and its legal right to exist.

          A tech company investing in R&D, or even doing a bit of skunk works is not "frivolous". It is precisely aligned with a long view goal of maximizing profits and increasing shareholder value. The directors have a lot of leeway if this is all you have got to sue them on.

        • Re: (Score:3, Interesting)

          Members of the board of directors are directly appointed to their positions (including the chair!) by the shareholders themselves.

          No, they're elected at shareholder meetings. Slightly different, but I agree that if the shareholders don't like what the board of directors is doing, it's their own damned fault for electing them.

        • Re:Bill Gates? (Score:5, Insightful)

          by msobkow ( 48369 ) on Tuesday February 10, 2009 @08:50PM (#26807443) Homepage Journal

          Spending money on R&D is not the same as "spending frivolously." The whole point of R&D is to experiment with new technologies, some of which pay off, some of which don't.

          Kudos to Microsoft for actually investing in their future, rather than sitting on the cash pile. To hell with the whinging "investors" who expect money for free.

          • by Moraelin ( 679338 ) on Wednesday February 11, 2009 @07:25AM (#26810829) Journal

            Spending money on R&D is not the same as "spending frivolously." The whole point of R&D is to experiment with new technologies, some of which pay off, some of which don't.

            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

        • Re: (Score:3, Insightful)

          by jonadab ( 583620 )
          > They could refer to the company charter, which often has a phrase where the primary objective
          > of the company is "to maximize profits and increase shareholder value". If that is the case
          > for Microsoft (I have no reason to not think so here), the directors are violating a primary
          > tenant of their charter if they spend money frivolously.

          Trying to show that eight billion for R&D is sufficiently frivolous to warrant corrective action could be something of an uphill battle.

          This is Microsoft we
        • Re:Bill Gates? (Score:5, Informative)

          by Herby Sagues ( 925683 ) on Tuesday February 10, 2009 @10:35PM (#26807729)
          If you think Bill Gates is the problem, you have not been watching the numbers. Bill led the company 100% until about year 2000. Ballmer took the lead since then. A short time later Microsoft switched from 50% annual growth to 20% annual growth, a change directly related in the view of many to the new policies being introduced by Ballmer. Still, Microsoft earns more money in a week than most Fortune 500 companies get in a year. It is still making more money than all it's competitors together, and up until last year, it was growing more than all of them salve two. So if you are going to get rid of someone, get rid of Ballmer. He's just not effective. Bill Gates, the "charlatan" built the most successful and profitable company ever. If he's a charlatan, I want to be one.
    • by fuzzyfuzzyfungus ( 1223518 ) on Tuesday February 10, 2009 @05:57PM (#26805459) Journal
      No need to be informed when you can be angry.
      • Re:Bill Gates? (Score:4, Insightful)

        by dwarg ( 1352059 ) on Tuesday February 10, 2009 @11:12PM (#26807947)

        You've been modded funny but I would give this an insightful myself. It's similar to my new favorite phrase that I may have made up, "The less you know, the easier it is to have a strong opinion about it."

        With the amount of money spent on marketing dwarfing what is spent on R&D by almost every industry, I cringe at someone saying too much is being spent on R&D. It may or may not be true in this case, but I think the larger problem is Microsoft's inability to execute on the ideas they come up with.

        Case in point, the Zune could have been a great product had they taken the time to make the wifi useful and used their weight to pressure the music industry into giving customers a better, non-DRM'ed, experience. Instead they slapped together a product in their usual manner and went to the music industry to let the RIAA dictate what kind of experience they could give their customers.

        Apple can spend a fraction of what M$ spends on R&D because they make up for it with good execution.

    • Re:Bill Gates? (Score:4, Insightful)

      by b4upoo ( 166390 ) on Tuesday February 10, 2009 @06:11PM (#26805645)

      Geez, about the only good thing that we could agree upon about Microsoft is that they do some research even though they may not complete the projects. I'd rather attack them for the really stupid stuff than for doing research which might actually give them a clue.

      • Re:Bill Gates? (Score:4, Insightful)

        by HangingChad ( 677530 ) on Tuesday February 10, 2009 @07:15PM (#26806479) Homepage

        Geez, about the only good thing that we could agree upon about Microsoft is that they do some research even though they may not complete the projects.

        The issues isn't that they do research, or even that Microsoft spends more than their peers. The issue is MS spends disproportionately more for research and loses market share. Instead of putting that money into creating the best operating system ever put on computers, they spend $7.5 billion and get the Zune.

        Rumblings from the stockholders. Now isn't that interesting. Microsoft has been able to keep their earnings up, but so did Enron. Right up to the end.

    • by Anonymous Coward on Tuesday February 10, 2009 @06:14PM (#26805703)

      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.

      • by MediaStreams ( 1461187 ) on Tuesday February 10, 2009 @06:26PM (#26805865)

        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.

      • Microsoft has really got their shit together with the security and stability of Windows.

        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

        • by Toonol ( 1057698 ) on Tuesday February 10, 2009 @07:14PM (#26806473)
          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.
          • Re: (Score:3, Interesting)

            by moosesocks ( 264553 )

            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 comple

  • Death march (Score:5, Insightful)

    by religious freak ( 1005821 ) on Tuesday February 10, 2009 @05:47PM (#26805301)
    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.
    • by UnknowingFool ( 672806 ) on Tuesday February 10, 2009 @05:51PM (#26805355)

      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.

      These days Gates only owns about 8% of MSFT. He probably has greater influence than his ownership. 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. :P

      • If their R&D... (Score:5, Insightful)

        by msauve ( 701917 ) on Tuesday February 10, 2009 @06:26PM (#26805861)

        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.

      • Re: (Score:3, Interesting)

        by Culture20 ( 968837 )
        My friends and I have been wanting something like Surface for more than a decade; to use in Role Playing games. Big plexiglass boards with patchwork graph paper and grease pens don't always do what you want.
  • Stalemate. (Score:5, Insightful)

    by Darkness404 ( 1287218 ) on Tuesday February 10, 2009 @05:47PM (#26805307)
    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.
    • Re:Stalemate. (Score:5, Insightful)

      by j0nb0y ( 107699 ) <{moc.oohay} {ta} {003yobnoj}> on Tuesday February 10, 2009 @06:02PM (#26805539) Homepage

      It's not against antitrust laws to simply be a large company. And it's not against antitrust laws for a large company to simply grow either.

    • by Penguinisto ( 415985 ) on Tuesday February 10, 2009 @06:17PM (#26805729) Journal

      Well, there's always dividends... If Apple can do it on half the budget, and Linux can do it on what, 1/100th the budget (veeeery rough estimation, folks)?

      Maybe what they need to do is to point their R&D in better directions, shake up its staff hard (starting at the top), and roll the rest into dividends.

      This way the shareholders will be less sue-happy, they don't fall afoul of monopoly concerns, and they might even get a bit of profit out of all that innovation they keep talking about. We also get better and/or decent new products as a side-benefit.

      I know, too much to ask and all, but they're going to have to do something, what with their marketshare shrinking and all...

      /P

    • Re:Stalemate. (Score:5, Insightful)

      by mblase ( 200735 ) on Tuesday February 10, 2009 @06:51PM (#26806163)

      On one hand it must keep evolving and changing to attempt to be better than Linux and Apple

      That's not the Microsoft I know. The Microsoft I've come to know focuses on (a) maintaining its dominance in the office environment and (b) imitating other technologies' success stories as quickly as possible. That's not evolving, that's mimicry.

  • by Just Some Guy ( 3352 ) <kirk+slashdot@strauser.com> on Tuesday February 10, 2009 @05:48PM (#26805319) Homepage Journal

    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.

    • by Just Some Guy ( 3352 ) <kirk+slashdot@strauser.com> on Tuesday February 10, 2009 @05:54PM (#26805393) Homepage Journal

      If you're the kind of jackass who dismissed the idea of transistors because we already had vacuum tubes

      Darn it, hit Submit too quickly.

    • Re: (Score:3, Interesting)

      by AKAImBatman ( 238306 ) *

      Here's the key issue: There's little evidence that anything useful has come out of Microsoft Research. Ever. They fund a lot of pie in the sky projects, with the resulting technology appearing to sit on the shelf indefinitely. A very odd situation for a technology company.

      I've stated this before and I'll state it again. I often think that Microsoft Research is a way for MS to keep the top researchers away from the competition. Microsoft themselves doesn't have anything to do with them, so they simply let th

      • by bmajik ( 96670 ) <matt@mattevans.org> on Tuesday February 10, 2009 @07:21PM (#26806559) Homepage Journal

        Well, here's an anecdote.

        6 or 7 years ago, when I was a low[er] level QA person at MSFT, I had a recurring meeting with someone from MSR because my division was using the new binary analysis and instrumentation tools that they had cooked up. I was one of the people implementing that toolchain in our production and testing process.

        Now every product and every team at Microsoft uses that toolset.

        Every year, MSR holds "Techfest", which is kind of like the science fair, except all of the experiments are awesome. MSR folks setup boothes/demos etc to show off what they've been up to. Normal MS employees attend this thing to allow for exactly the sort of informal, node-to-node idea exchange that ends up building the bridges from academia to engineering that you posit must not exist. And that is just one mechanism -- one that is accessible to low-level people in product groups for them to learn _what_ interesting things are happening, and who is doing them, and how to stay abreast of what's going on there.

        I had an email conversation last month with someone at MSR who does visualization reseach about the publicly-downloadable visualization controls. I'm using them in one of my internal reporting tools and have some feature asks and was explaining some of the problems I'm having with the currently released bits. They've got new stuff they've been working on that will probably help me out when it's ready, and now they're aware of one more "real-world" use case for visualuzations of the type they're working on.

        I'm a nobody, leaf-node QA engineer. And I've had interactions with MSR that have made my job better and easier, and the products I've worked on better.

      • by hacksoncode ( 239847 ) on Tuesday February 10, 2009 @07:55PM (#26806921)

        Actually, ClearType came from R&D. You have to admit, it's pretty necessary in order for LCD monitors to take off.

        Their handwriting recognition IME's did too.

        In fact, *tons* of stuff that's in Windows and Office came out of MS R&D. It's just not that flashy.

        Of course, tons more didn't. But that's how R&D goes.

    • by electrosoccertux ( 874415 ) on Tuesday February 10, 2009 @06:05PM (#26805565)

      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.

      They're welcome to sell their shares if they don't like it.

      When you get as big as Microsoft (as in, you've saturated your market) you've got to _create_ new markets to sell to. This is why they dump so much into R&D.

      If they want to fuss at MS they should fuss about the guys that came by the office the other day. They do pretty much nothing but drive around to different people that purchase Microsoft Server licenses and tell them "Eh? Go read the documentation, it's all in that book we gave you. No, sorry, we can't do that, this is how the product works and if you don't like it, too bad." IE, they do nothing. They make ~$500K each and tether their laptops to their cellphone and play WoW all day while not telling clients to figure it out.
      There probably aren't many of those guys though.

    • Re: (Score:3, Insightful)

      Exactly. At such time as "angry shareholders" produce their own useful technology, I'll listen. Until then, I thank Bell Labs, Google, and anyone else who has understood that the best technical innovations happen without micro-managerial bean counters.

  • Me thinks... (Score:4, Interesting)

    by FooGoo ( 98336 ) on Tuesday February 10, 2009 @05:50PM (#26805341)

    This has less to do with Bill Gates mumbling and jumbling and more to do with the stock market tumbling and tumbling.

  • by MadHakish ( 675408 ) <madhakish@gmail. c o m> on Tuesday February 10, 2009 @05:51PM (#26805359)
    Windows Vista?
  • The simple answer (Score:4, Insightful)

    by Ancient_Hacker ( 751168 ) on Tuesday February 10, 2009 @05:51PM (#26805361)

    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.

  • by linuxwrangler ( 582055 ) on Tuesday February 10, 2009 @05:52PM (#26805381)

    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.

    • by clodney ( 778910 ) on Tuesday February 10, 2009 @06:10PM (#26805627)

      Bell Labs, Xerox PARC, IBM's various research labs, 3M's research and others have all generated wonderful new things from their basic research.

      And yet for all the raves these research groups generate, it very seldom turned into successful product launches for the parent company. Xerox is famous for inventing lots of cool technology that became successes for other companies. Bell Labs had a fearsome reputation, but much of its output never ended up in BellCorp products - otherwise we would still be talking about AT&T as a dominant Unix vendor.

      3M is a better example, but most of their projects are closer to home - production engineers working on product ideas of their own, rather than basic research.

      MS Research may do great things, but few companies are willing to take the schedule and financial risk that goes along with productizing a new technology. Making the jump for R to D is difficult for a company that wants to know a schedule, budget, ship date and ROI within plus/minus 10%.

      • by frank_adrian314159 ( 469671 ) on Tuesday February 10, 2009 @07:20PM (#26806541) Homepage

        Xerox is a good example of this. However, the other two are less good. You mention that 3M doesn't have a particularly large research arm separate from their manufacturing R&D. As for Bell Labs, remember that at the time it was truly ferocious, it wasn't allowed to do much with their technology because of the company's regulated monopoly status. They could develop UNIX for internal use all they wanted (and transistors and routing algorithms and...), but they couldn't actually sell it outside the Bell System. And by the time they could sell it externally, it wasn't like they had anyone left who could have productized or sold it for them.

        In reality, corporate R&D has been dying for the last thirty years, except in the military space. It's a shame because the investors are simply eating the seed corn from which new products could have sprung.

  • by speedtux ( 1307149 ) on Tuesday February 10, 2009 @05:53PM (#26805387)

    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.

    • by tres ( 151637 ) on Tuesday February 10, 2009 @06:29PM (#26805905) Homepage

      Apple is not doing research on pie in the sky pet projects, but is rather focused on doing exactly what needs to be done to make a good user experience for the products that they sell.

      The unstated premise of your post seems to be that Apple should also be trying to research stuff for the sake of doing research. Although I like the idea of a corporate entity giving back to the public (since, after all, the original idea of a corporation was that it existed for the public good -- not the shareholders), this kind of research isn't for the public good; it's to do an IP land grab -- like some dog peeing on a bush to mark its territory.

      It would seem that Apple is simply focused on what they're good at. They're not trying to dabble in everything so they can claim some licensing rights later on.

      I hope that we see an end of these massive R&D departments, since they are simply a symptom of the very broken patent system.

  • Screw your profit? (Score:3, Insightful)

    by girlintraining ( 1395911 ) on Tuesday February 10, 2009 @05:58PM (#26805475)

    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

  • What?!? (Score:5, Funny)

    by Locke2005 ( 849178 ) on Tuesday February 10, 2009 @05:59PM (#26805501)
    I, for one, think all that money spent on Microsoft Bob [toastytech.com] and Microsoft Songsmith [youtube.com] was money well spent!
  • MS Needs R&D (Score:5, Insightful)

    by Ohio Calvinist ( 895750 ) on Tuesday February 10, 2009 @06:01PM (#26805525)
    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.
  • Shareholder, huh? (Score:5, Interesting)

    by religious freak ( 1005821 ) on Tuesday February 10, 2009 @06:02PM (#26805535)
    From TFA:

    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 [msn.com], institutions (which are generally very passive owners) own over a billion shares [msn.com], and mutual funds (mostly owned indirectly by you and me through 401k plans - also very passive owners) own a substantial amount [msn.com], 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.

  • by 5pp000 ( 873881 ) on Tuesday February 10, 2009 @06:16PM (#26805723)

    From TFA:

    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). [...]

    "I still hold Microsoft so I still hold hope it will achieve what I think is its potential. By now it should have been $100+ per share. We've seen Apple rise [...]. (Funny. I don't even use Windows ⦠I love the Mac.)

    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???

  • by WindBourne ( 631190 ) on Tuesday February 10, 2009 @06:17PM (#26805735) Journal
    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.
  • by swinefc ( 91418 ) * on Tuesday February 10, 2009 @06:18PM (#26805753)

    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".

  • by MostAwesomeDude ( 980382 ) on Tuesday February 10, 2009 @06:39PM (#26806031) Homepage

    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.

    • Re: (Score:3, Informative)

      by geekoid ( 135745 )

      "they're forced, by legal obligation, to work on making stock prices as high as possible."

      that is false.

  • by bmajik ( 96670 ) <matt@mattevans.org> on Tuesday February 10, 2009 @06:41PM (#26806051) Homepage Journal

    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.

  • by jsac ( 71558 ) on Tuesday February 10, 2009 @06:56PM (#26806213) Journal

    - 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...)

  • by ivoras ( 455934 ) <[rh.ref] [ta] [sarovi]> on Tuesday February 10, 2009 @07:15PM (#26806483) Homepage

    It may not be popular or known to common users, but Microsoft Research [microsoft.com] 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 [microsoft.com]. Here are some [microsoft.com] random [microsoft.com] pages [microsoft.com] 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?

  • by icepick72 ( 834363 ) on Tuesday February 10, 2009 @07:23PM (#26806583)

    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...

  • Just to be fair: (Score:3, Interesting)

    by nurb432 ( 527695 ) on Tuesday February 10, 2009 @07:49PM (#26806865) Homepage Journal

    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...

  • by Locutus ( 9039 ) on Tuesday February 10, 2009 @08:36PM (#26807383)

    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

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