Paul Kedrosky points to an interesting slide in Microsoft CTO Craig Mundie’s recent analyst day presentation. The subject is R&D, the point Craig is making is that Microsoft is way outspending Google and others.
Paul points out:
Compelling, right? Microsoft’s spending heavily on the Next Big Thing, while its layabout competitors, you know, aren’t.
Well, I’m not so sure. Google has added over a $100-billion in market capitalization during the period, while Microsoft has shed around $30-billion in market cap. Similarly, Apple has added around 30-billion in market cap, while IBM has shed around $20-billion.
If you were of a grouchy frame of mind as a long-suffering shareholder, you could use this slide to argue that Microsoft overspends on R&D and investors would be better off off if it spent way, way less.
To which I’d add: I wonder how MSFT got these figures. Given that Google pretty much runs its engineering department as an R&D lab (ie, you can work on whatever you want at least 20% of the time), I’m guessing these figures are a bit off.