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Businesses The Almighty Buck Technology

IT's Big Spenders 61

Posted by samzenpus from the money-solves-all-problems dept.
TechEGrl writes "R&D spending increased by 17 percent in 2006, according to a new report on CIO Insight that ranks the top 81 R&D spenders. The spending was mostly targeted at consumer rather than business products, though Microsoft — not surprisingly the biggest spender with an investment of $6.58 billion — did throw significant change at biz apps like the Vista operating system. Investment in Internet search was dominated by Google, which more than doubled its R&D spending in 2006 and far outpaced competitors like Yahoo and eBay."
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IT's Big Spenders More

IT's Big Spenders

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  • Interestingly.. (Score:4, Interesting)

    by dragonquest ( 1003473 ) on Thursday April 19, 2007 @04:10AM (#18795137)
    Interestingly Google is tagged under 'Software' rather than 'Internet Services' like Yahoo. Probably a sneak peek at what's to expect.

  • I'll see your girlie 81 and raise you 1000 (Score:5, Insightful)

    by djupedal ( 584558 ) on Thursday April 19, 2007 @04:21AM (#18795187)
    The text says 'top 81', then the article says 81 businesses were selected and appraised. The text labels Microsoft as being the biggest spender, at $6.58 billion, while also labeling this as 'software' related. The article points out how MS spent big on the latest XBox, which is hardware...someone needs to make up their minds. All-in-all, pretty sloppily written piece. But hey...it's a slow news day, so what the heck.

    For a bit of fun perspective, China spent $136 billion on R&D in 2006.

    And who could forget the Nov. 2006 study from Booze Allen Hamilton [creativematch.co.uk], which stated:
    "R&D spending doesn't guarantee business success" - New study reveals that there is no relationship between R&D spending and sales growth, earnings, or shareholder returns.

    The Booz Allen Hamilton study "Global Innovation 1000--Money Isn't Everything" analyzed the world's top 1,000 corporate research and development spenders.

    It found remarkably that the pace of corporate R&D spending continues to accelerate, as many executives continue to believe that enhanced innovation is required to fuel their future growth.

    Spending more doesn't necessarily mean gaining more. The study identified individual success stories. More pointedly it found no discernible statistical relationship between R&D spending levels and nearly all measures of business success, including sales growth, gross profit, operating profit, enterprise profit, market capitalization, or total shareholder return.

    Booz Allen Vice President Barry Jaruzelski said: "Successful innovation demands careful coordination and orchestration both internally and externally. How you spend is far more important than how much you spend."

    I pfft in your general direction!

    • Re: (Score:3, Informative)

      by Anonymous Coward
      It's also worth mentioning that the list is far from complete: for instance, Nokia put 3825 million euros, or 3230 million dollars to R&D at 2005. More recent data would probably give even more prominent position on that list. One can only wonder what other companies are left out.

      • Oops (Score:1, Insightful)

        by Anonymous Coward
        3825 million euros was 4530 million dollars back then, of course. Hrm.
      • The title is kind of misleading, since I assumed, just like you, that it was world-wide. But this is not the case here, and it's only for the US.

    • ON the Xbox angle... (Score:4, Insightful)

      by brunes69 ( 86786 ) <slashdot@keirstead3.14159.org minus pi> on Thursday April 19, 2007 @06:06AM (#18795593)
      Not saying the article isn't a POS, but the remarks that they spent most on software with the biggest recipient being the Xbox is perfectly accurate.

      People need to remember - while Microsoft makes the Xbox they are NOT IN the hardware business. Every aspect of the Xbox's manufacture is outsourced. and it's design is a fairly simple one compared to say the PS3. The most complex part of the Xbox is by far the video chipset which is outsourced in it's entirety.

      Sure Microsoft has a lot of input no doubt into the design of things like the CPu and the vieo chopset - but they don't put up most of the R+D costs there it is the manufacturer they outsource to that does. The vast majority of Microsoft's R+D last year in the Xbox was undoubtedly for things like Xbox Live the Xbox OS, and games. Hardware would be a very small portion.
      • "but they don't put up most of the R+D costs there it is the manufacturer they outsource to that does.

        Are you trying to say that the vendor for the custom processor, Intel, gifted the entire R & D bill for a chip that they can't sell to anyone else? Same for Nvidia, which developed the custom graphics processor, and Flextronics, which was responsible for developing the enclosure and tooling to produce the mechanical parts (again, all unique to the XBox)...?
        • Tooling costs, as one example, can stand o

    • For a bit of fun perspective, China spent $136 billion on R&D in 2006.
      That's overall R&D, not software R they just passed Japan for the #2 spot, (Japan spent $130Bn in 2006).

      The US R&D spending amount was far higher -- $330Bn approximately. US pharma companies alone spent $55.2Bn on R&D in 2006.
    • "R&D spending doesn't guarantee business success" - New study reveals that there is no relationship between R&D spending and sales growth, earnings, or shareholder returns.

      I can agree that R&D spending does not guarantee business success. Business is a risk. Luck and timing is involved, but w/o R&D, where would we be today?

      Xerox's R&D gave us the GUIs that we use today. Bell gave us the OSes we use today. R&D gives us portable pocket cell phones instead of the car phones from ye

  • ...and they still get it wrong (Score:4, Interesting)

    by peterprior ( 319967 ) on Thursday April 19, 2007 @04:44AM (#18795277)
    $6.58 billion on R&D and they still have dialog boxes like this. [abock.org]

    Incredible.
  • Well, I can't fathom what Microsoft are spending $6.58 billion dollars on, especially with regard to Vista(!?). They're getting ripped off. That's the problem when a company gets that large. It starts to act rather like an organisation in the public sector, with countless departments being needlessly created, consuming inordinate amounts of money for no apparent reason with no clear goals. Microsoft may think R & D spending is the way to get ahead, but I think they've totally ignored the organisational
    • nail on the head right there.

      traditionally, MS has been able to crush all commers buy copying their software, intergrating it with the OS and hampering efforts of other companys from doing the same.

      google makes them nash they teeth with this because web advertising it's tied to the OS at all, and will display and be clicked on in all but the most blatantly anti competitive moves. they wouldn't be game to say script IE so that you can't visit google.com.

    • Well, I can't fathom what Microsoft are spending $6.58 billion dollars on, especially with regard to Vista(!?)
      Lobbying, marketing (including wholesale sock puppet purchases), legal fees, purchases of souls, fresh kittens for their grinders... just the usual stuff...

    • Re: (Score:1, Informative)

      by Anonymous Coward
      Well, I can't fathom what Microsoft are spending $6.58 billion dollars on, especially with regard to Vista(!?).

      See for yourself what they're researching. [microsoft.com]

      Say what you will about their business tactics, but Microsoft does do a large amount of basic research, much of which hasn't been (and won't be, for the foreseeable future) marketed as a product.
    • There was an article here a few months ago by an ex-MS developer. He was on one of the teams(yes, plural) working on the shutdown menu. I think there were like 40 people working on it for about two years.

      So yes, MS is spending plenty, but that doesn't mean they're accomplishing much.

  • So, what is technology (Score:2, Interesting)

    by Askmum ( 1038780 )
    The list does make me wonder: what is a technology company? The biggest trigger for this wonder is the strange omission of one Xerox corp. With $922 million of R&D in 2006 it should have been ranked 13 (which seems strangly fitting considering the IP-Address space they have).
    • AT&T had $233M in R&D in 2006, according to their claim to the SEC [edgar-online.com]. I noticed that no telecom companies were listed, or any serious-router manufacturers (Cisco spent $4.1B in 2006 R&D, for instance, as documented here [edgar-online.com].

      Shoddy article.
    • Xerox is a business equipment company; Cisco is a networking and telecom device company. You have to draw the line somewhere, and this article limited it to certain categories used by Yahoo finance.

      • Re: (Score:2)

        by Macgrrl ( 762836 )

        Xerox do far more than copiers. The operate the PARC [xerox.com] research faility.

        From wikipedia: "PARC (Palo Alto Research Center, Inc.), formerly Xerox PARC, is a research and development company in Palo Alto, California that began as a division of Xerox Corporation. It was founded in 1970, and incorporated as a separate company (wholly owned by Xerox) in 2002. It is best known for inventing laser printing, Ethernet, the modern personal computer graphical user interface (GUI) paradigm, object-oriented programming, a

  • Bill needs a new t-shirt (Score:5, Funny)

    by supersnail ( 106701 ) on Thursday April 19, 2007 @05:18AM (#18795413)
    I spent $6,000,000,000 and all I got was this loosy OS.

  • Biz Apps? (Score:3, Insightful)

    by fruey ( 563914 ) on Thursday April 19, 2007 @05:28AM (#18795467) Homepage Journal
    "did throw significant change at biz apps like the Vista operating system"

    I call BS immediately. Nothing to see here, move along.

  • bang for buck? (Score:3, Insightful)

    by rapiddescent ( 572442 ) on Thursday April 19, 2007 @06:09AM (#18795609)
    The problem with these figures is that they do not represent "bang for buck" in that it is makes it fiscally advantageous to mark what some people would classify as normal run of the mill product development as "R&D".

    Also, it would be far more interesting if we could determine the R&D spend that has come about from open source software (academics) or is directly spend on open source software (IBM, HP et al).

    It is only a hunch, but I think the open source software has enabled, and consumed a massive part of global research and development -- but significantly, is not costed.

    rd

  • Well they're not spending it on people (Score:3)

    by gelfling ( 6534 ) on Thursday April 19, 2007 @06:15AM (#18795635) Homepage Journal
    At least not here in North America. So far it's been more of the same old Soviet agitprop of "Comrades! This is the Greatest Year Ever - We must continue to sacrifice for the Greater Good and compensation of our Dear Leaders !!!"
  • DARPA spent only $3.01 billion. Less on electronics.

    They're falling...
  • You guys might take the piss out of Bill Gates, but MS's reputation as the #1 Big Spender gets him respect from the ladies.

    The minute he walks in the joint, they can see he is a man of distinction, a *real* big spender. Some even claim that he's so good looking(!) and so refined that they'd like to let him know what's going on in their mind.

    And let me tell you, these girls are fussy; they don't pop their cork for every guy they see.

  • Incomplete list? (Score:1, Redundant)

    by osbjmg ( 663744 )
    I know cisco is near the $1B mark, and I'm sure there are others that I can't think of right now ;)
    • There are a TON of companies not on this list. No Cisco, no EMC, no Brocade, no Hitachi... (Can you tell I'm in storage?) I mean, I'm not saying all of those companies belong in the top 10 (Cisco probably does), but they probably all spent more than $23M last year. All in all, a really worthless article.

      • Re: (Score:1)

        by osbjmg ( 663744 )
        Yea, not sure how they got their numbers. I can say that Huawei is rightly not in the list, they just steal R&D, must be easier. I guess it doesn't matter in China anyway.
  • Question the accuracy or completeness of this list. Cisco who spends an average of 3.2 Billion in R&D a year should have been right in the top 5. Also where are Nortel, Lucent, Juniper, and the Telcos?

    source: http://www.ameinfo.com/114768.html [ameinfo.com]

    Adeptus
  • Now the big question is how much of this is applied for actual R&D. You see you can write off a significant amount of money by claiming it as R&D. Money is not a indicator of R&D investment, it only indicates how much was designated R&D spending to avoid paying taxes on it.
  • ...and no, I have not Read That Fine Article (yet), but still...

    Makes me wonder where some other reports are, such as the "Top 17.4 Most Distracting Article Titles", etc.
  • This whole list is suspect, some firms that are undoubtedly spending more on R&D are excluded, Qualcomm for instance.
  • I guess CIO Insight didn't spend enough in R&D to come up with a top 100.

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