Gauging the return on R&D: Do tech giants spend too much?

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Microsoft spend too much on R&D for the return, IBM spend right amount

IBM has always been a set of collective businesses with a management that is without technology bias. This is a powerful formula for long term success.

Microsoft by comparison is pretty much a one trick pony to date, with the Desktop being their jelly bean product, a success that they've failed to replicate in other markets to date.
This is similar to Xerox.

On the face of it, IBM's management is hardly ever in the news, predicting the future, and railing against competitors, whereas this is common in Microsoft.

You could say that Microsoft's one off success was driven by the personal vision and drive of the individuals in charge. However, history pretty much predicts that this means there will be no follow up business. Xerox had Desktop technology, but failed to realise it. IBM had Desktop technology, but was outcompeted by microsoft.

And in many ways, this was one big project: IBM funded microsoft's development, microsoft took on the team from Xerox.

Microsoft won that by vision and drive. IBM will never have this vision and drive for one individual target.

But then once the vision and drive for the single product is done, IBM keeps motoring on other projects, whereas Microsoft will probably continue to fail to succeed in other projects (but spend a fortune trying to replicate their success, which incidentally was largely achieved without massive R&D $$$).

This is very much tortoise and hare. IBM's tortoise keeps rolling and lives to 100, the hare blasts along for a bit, maybe finishes one or two races first, but then drops dead.

There is no right and wrong here. Our world is enriched by both development models, and would be worse without either of them.

Microsoft could try to become an IBM, but I think Microsoft just isn't built right, and at the end of the day, how many IBMs do you need?

Posted by: stevey_d   Posted on: 05/14/09 You are currently: a Guest | Members login | Terms of Use

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