6 ms·

Microsoft spends a significant amount on basic research, like Bell labs used to and Microsoft research publishes a lot of publications. 15% of the research budg

Microsoft spends a significant amount on basic research, like Bell labs used to and Microsoft research publishes a lot of publications. 15% of the research budget goes to universities for research, that could keep the profits lower than Apple.

orijing 16y ago
In fact, Microsoft spends around $2-2.5b on R&D per quarter [1] while Apple spends $500-600m [2]. That certainly more than makes up for the difference. [1] http://finance.yahoo.com/q/is?s=MSFT http://finance.yahoo.com/q/is?s=MSFT [2] http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii
- wooster 16y ago
  I was on a team once at Apple with ~15 people on it. At one point, we found out the equivalent group at Microsoft had ~500 people. Most people I've talked to who worked elsewhere are shocked at how small the teams at Apple are.
  - singular 16y ago
    Did you find the small team size a pleasant experience? Is it a case of many small teams adding up to a lot of people, or genuinely few small teams?
    - jballanc 16y ago
      My experience was that it was genuinely small teams...and it was fun! It's one of the ways that Apple maintains a startup-like atmosphere despite being such a large company. Oh, and Apple remains a very flat company. I was 5 degrees removed from Steve Jobs, and I don't know anyone that was more than 8...including retail staff!
      - mkramlich 16y ago
        > Oh, and Apple remains a very flat company. I was 5 degrees removed from Steve Jobs, and I don't know anyone that was more than 8...including retail staff! This sounds funny from my POV because I work mostly with startups now so I'm usually 0-1 levels away from the CEO. In the last 2 weeks alone I've ended up in F2F conversations with folks who I originally thought were some bizdev guy, perhaps a senior technical architecht, but no, turns out, that was the CEO. (... ", bitch." <--- per The Social Network) I was in a conversation the other day with a guy who was the CEO of a potential competitor, but at the time I didn't know he was the CEO, or that they were a potential competitor, and likewise in reverse. Funny stuff. So yeah, this whole "flat company" with a mere 5-8 levels of hierarchy, makes me giggle. Back to my Terminal session, which this CEO considers his office. :) (not criticising, just pointing out the humor of relative POV's)
  - kenjackson 16y ago
    What group is that? From what I hear most groups at MS aren't huge either -- unless you aggregate them (for example Visual Studio, counting all of the languages, shells, debuggers, etc...). Unless you're going to say there are only 15 people on iOS. In which case I will be seriously impressed!
    - jballanc 16y ago
      When I was at Apple, I was on a team of 6 within the server group. When I told a friend in CoreOS that we had 6 people, he wanted to know what justified our team being so large! Oh, and if you want an Apples to Apples comparison...I was there when the Server group merged with the Dev Tools group...and the merged group is maybe 300 engineers total (all of server was about 70 engineers...all told OS X and iOS combined only comes to something like 3000 engineers). A fun little link: http://www.wolframalpha.com/input/?i=revenue+per+employee+at+apple%2C+google%2C+and+microsoft http://www.wolframalpha.com/input/?i=revenue+per+employee+at...
      - kenjackson 16y ago
        all told OS X and iOS combined only comes to something like 3000 engineers That sounds about right. For Win7 about 2500 engineers (1000 devs, 1000 testers, 500 PMs). I suspect WP7 is probably 500 engineers. So Windows + WP7 is probably right around the same number. Interesting to think that in terms of products where Apple and MS compete directly, they probably have very similar headcounts. There's a mythology that MS is this huge beast that will crush you (at least in the past). But in reality MS ships 100+ different products. The company is spread a lot thinner than lay people might imagine. http://www.pc-wholesale.com/networking-news-a-small-army-of-engineers-slated-to-work-on-windows-7.html http://www.pc-wholesale.com/networking-news-a-small-army-of-...
- ellyagg 16y ago
  So I don't understand. Are you saying that research money is essentially a donation so that's why it doesn't "count"? Isn't the point of a company's research team to develop profit centers that not only cover their own costs but then some? Because the way I'm reading this Apple's R&D is doing it better and more efficiently.
  - contextfree 16y ago
    If you're comparing short-term profits it might be significant, in that it could indicate whether the profits indicate sustainable growth or just "eating the seed corn" via R&D cost cutting which sacrifices future profits. Though over a long period (but how long? years? decades?) it shouldn't matter, since as you point out if past R&D expenses were effective from a business POV they should be reflected in future profits.
ugh 16y ago
And?
ksolanki 16y ago
Microsoft can keep this up until profits are growing. Here's hoping this research funding doesn't dry up like Bell labs' did. It is hard to quantify the benefits of spending on basic research. Apple puts a lot of focus on design, wheres Microsoft on technology (or science?).
pohl 16y ago
May 2010: marketCap(AAPL) > marketCap(MSFT) "Bah, it's revenue that matters" October 2010: revenue(AAPL) > revenue(MSFT) "Bah, profit is the real metric" April 2011: profit(AAPL) > profit(MSFT) "Bah, basic research is where it's at!"
- cooldeal 16y ago
  I was just making an observation, not making an excuse for Microsoft. Apple may have "won" long ago vs. MS for all I care, if that is what you want me to say. I don't know how my reply got twisted into something that I didn't say.
  - pohl 16y ago
    I was also just making an observation that I thought was amusing. I was just riffing off of your post, not degrading it. Not all replies are arguments. I agree that Microsoft has done a lot of great research, and I hope that some day they can turn more of it into products. Alas, from reading the pub directory at llvm.org, for example, I get the impression that when something similar to Bartok & Singularity become products for real users they're going to come from elsewhere. Time will tell, though. I do love my Kinect.
  - rapind 16y ago
    Nothing new. Some people get very excited about anything that might somehow be construed as negative about Apple. After all, we need to nip it in the bud before even a seemingly innocent comment can set the precedent that Apple criticism is acceptable.
contextfree 16y ago
The basic research budget (MSR) is a pretty small part (2%?) of the overall MSFT R&D budget. Though probably still one of the biggest industrial research budgets.
mkramlich 16y ago
> Microsoft spends a significant amount on basic research, like Bell labs used to and Microsoft research publishes a lot of publications. I've always felt they spent so much on "research", in part, as a way to reduce their reported profits. Because Microsoft was notorious for mostly just copying what others did first (see Apple --- and yes I know about Xerox PARC), or acquiring/rebranding/integrating (Spyglass -> IE, etc.), and only a small percentage of so-called original/in-house stuff. When the original version of C# and .NET came out it was so hilariously obvious what they were ripping off at that time (cough-Java-cough), they didn't quite shave off all the boilerplate for those in the know. But They Capitalized Differently. Oooooh. ;) On a related note, I once knew someone who officially worked in software R&D. And I noted they mostly spent a lot of time surfing the web and then parroting some sexy sounding thing they read about recently. Ironically (or not?) I think that's a not un-legitimate way, and certainly can be an effective way, to introduce new thinking inside a particular company, or introduce a new technology, like say as a pilot project. But to describe this process as requiring heavy spending (on software R&D mind you, not talking about hardware stuff) sounds ridiculous and an unnecessary money sink. Find a smart creative engineer. Take them off the leash. See where they go, what shiny nuggets they bring back. That's how you do practical software R&D, outside of academia. Doesn't require billions. Just brains, and it can be a side product of what your staff is already doing anyway -- if you have the right staff.

orijing 16y ago

In fact, Microsoft spends around $2-2.5b on R&D per quarter [1] while Apple spends $500-600m [2]. That certainly more than makes up for the difference. [1] http://finance.yahoo.com/q/is?s=MSFT http://finance.yahoo.com/q/is?s=MSFT [2] http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii

wooster 16y ago
I was on a team once at Apple with ~15 people on it. At one point, we found out the equivalent group at Microsoft had ~500 people. Most people I've talked to who worked elsewhere are shocked at how small the teams at Apple are.
- singular 16y ago
  Did you find the small team size a pleasant experience? Is it a case of many small teams adding up to a lot of people, or genuinely few small teams?
  - jballanc 16y ago
    My experience was that it was genuinely small teams...and it was fun! It's one of the ways that Apple maintains a startup-like atmosphere despite being such a large company. Oh, and Apple remains a very flat company. I was 5 degrees removed from Steve Jobs, and I don't know anyone that was more than 8...including retail staff!
    - mkramlich 16y ago
      > Oh, and Apple remains a very flat company. I was 5 degrees removed from Steve Jobs, and I don't know anyone that was more than 8...including retail staff! This sounds funny from my POV because I work mostly with startups now so I'm usually 0-1 levels away from the CEO. In the last 2 weeks alone I've ended up in F2F conversations with folks who I originally thought were some bizdev guy, perhaps a senior technical architecht, but no, turns out, that was the CEO. (... ", bitch." <--- per The Social Network) I was in a conversation the other day with a guy who was the CEO of a potential competitor, but at the time I didn't know he was the CEO, or that they were a potential competitor, and likewise in reverse. Funny stuff. So yeah, this whole "flat company" with a mere 5-8 levels of hierarchy, makes me giggle. Back to my Terminal session, which this CEO considers his office. :) (not criticising, just pointing out the humor of relative POV's)
- kenjackson 16y ago
  What group is that? From what I hear most groups at MS aren't huge either -- unless you aggregate them (for example Visual Studio, counting all of the languages, shells, debuggers, etc...). Unless you're going to say there are only 15 people on iOS. In which case I will be seriously impressed!
  - jballanc 16y ago
    When I was at Apple, I was on a team of 6 within the server group. When I told a friend in CoreOS that we had 6 people, he wanted to know what justified our team being so large! Oh, and if you want an Apples to Apples comparison...I was there when the Server group merged with the Dev Tools group...and the merged group is maybe 300 engineers total (all of server was about 70 engineers...all told OS X and iOS combined only comes to something like 3000 engineers). A fun little link: http://www.wolframalpha.com/input/?i=revenue+per+employee+at+apple%2C+google%2C+and+microsoft http://www.wolframalpha.com/input/?i=revenue+per+employee+at...
    - kenjackson 16y ago
      all told OS X and iOS combined only comes to something like 3000 engineers That sounds about right. For Win7 about 2500 engineers (1000 devs, 1000 testers, 500 PMs). I suspect WP7 is probably 500 engineers. So Windows + WP7 is probably right around the same number. Interesting to think that in terms of products where Apple and MS compete directly, they probably have very similar headcounts. There's a mythology that MS is this huge beast that will crush you (at least in the past). But in reality MS ships 100+ different products. The company is spread a lot thinner than lay people might imagine. http://www.pc-wholesale.com/networking-news-a-small-army-of-engineers-slated-to-work-on-windows-7.html http://www.pc-wholesale.com/networking-news-a-small-army-of-...
ellyagg 16y ago
So I don't understand. Are you saying that research money is essentially a donation so that's why it doesn't "count"? Isn't the point of a company's research team to develop profit centers that not only cover their own costs but then some? Because the way I'm reading this Apple's R&D is doing it better and more efficiently.
- contextfree 16y ago
  If you're comparing short-term profits it might be significant, in that it could indicate whether the profits indicate sustainable growth or just "eating the seed corn" via R&D cost cutting which sacrifices future profits. Though over a long period (but how long? years? decades?) it shouldn't matter, since as you point out if past R&D expenses were effective from a business POV they should be reflected in future profits.

ugh 16y ago

And?

ksolanki 16y ago

Microsoft can keep this up until profits are growing. Here's hoping this research funding doesn't dry up like Bell labs' did. It is hard to quantify the benefits of spending on basic research. Apple puts a lot of focus on design, wheres Microsoft on technology (or science?).

pohl 16y ago

May 2010: marketCap(AAPL) > marketCap(MSFT) "Bah, it's revenue that matters" October 2010: revenue(AAPL) > revenue(MSFT) "Bah, profit is the real metric" April 2011: profit(AAPL) > profit(MSFT) "Bah, basic research is where it's at!"

cooldeal 16y ago
I was just making an observation, not making an excuse for Microsoft. Apple may have "won" long ago vs. MS for all I care, if that is what you want me to say. I don't know how my reply got twisted into something that I didn't say.
- pohl 16y ago
  I was also just making an observation that I thought was amusing. I was just riffing off of your post, not degrading it. Not all replies are arguments. I agree that Microsoft has done a lot of great research, and I hope that some day they can turn more of it into products. Alas, from reading the pub directory at llvm.org, for example, I get the impression that when something similar to Bartok & Singularity become products for real users they're going to come from elsewhere. Time will tell, though. I do love my Kinect.
- rapind 16y ago
  Nothing new. Some people get very excited about anything that might somehow be construed as negative about Apple. After all, we need to nip it in the bud before even a seemingly innocent comment can set the precedent that Apple criticism is acceptable.

contextfree 16y ago

The basic research budget (MSR) is a pretty small part (2%?) of the overall MSFT R&D budget. Though probably still one of the biggest industrial research budgets.

mkramlich 16y ago

> Microsoft spends a significant amount on basic research, like Bell labs used to and Microsoft research publishes a lot of publications. I've always felt they spent so much on "research", in part, as a way to reduce their reported profits. Because Microsoft was notorious for mostly just copying what others did first (see Apple --- and yes I know about Xerox PARC), or acquiring/rebranding/integrating (Spyglass -> IE, etc.), and only a small percentage of so-called original/in-house stuff. When the original version of C# and .NET came out it was so hilariously obvious what they were ripping off at that time (cough-Java-cough), they didn't quite shave off all the boilerplate for those in the know. But They Capitalized Differently. Oooooh. ;) On a related note, I once knew someone who officially worked in software R&D. And I noted they mostly spent a lot of time surfing the web and then parroting some sexy sounding thing they read about recently. Ironically (or not?) I think that's a not un-legitimate way, and certainly can be an effective way, to introduce new thinking inside a particular company, or introduce a new technology, like say as a pilot project. But to describe this process as requiring heavy spending (on software R&D mind you, not talking about hardware stuff) sounds ridiculous and an unnecessary money sink. Find a smart creative engineer. Take them off the leash. See where they go, what shiny nuggets they bring back. That's how you do practical software R&D, outside of academia. Doesn't require billions. Just brains, and it can be a side product of what your staff is already doing anyway -- if you have the right staff.