Microsoft R&D and basic research

Paul Kedrosky: “At yesterday’s Microsoft analyst day in Redmond the company’s Craig Mundie put up a figure comparing cumulative R&D investment by major tech companies since 2000… [The figures show] a huge gap, with Microsoft outspending most of its competitors, including IBM, and massively out-spending arch-nemesis Google.”

Paul goes on to state that many shareholders might be unhappy or concerned that Microsoft “spends too much”. Others in the blogosphere are commenting that the figures aren’t correct, other companies conduct their research more efficiently, etc. I’d encourage the commenters to think about another factor related to the R&D spending numbers.

Microsoft and IBM have been leading our industry in “basic research” for some time. And the reason for this is quite simple- Microsoft and IBM are two of the largest and most diverse technology companies in the industry and have been for a number of years (IBM much longer obviously). Both companies have taken it upon themselves not only to develop new products or incubate new technologies but also to conduct basic research. As described in Wikipedia, basic research ” is conducted without any practical end in mind, although it may have unexpected results pointing to practical applications. The terms “basic” or “fundamental” indicate that, through theory generation, basic research provides the foundation for further, sometimes applied research. As there is no guarantee of short-term practical gain, researchers often find it difficult to obtain funding for basic research.” Of course not all research is basic or pure, but based on the definition it is easy to see the importance of this kind of research to lay a foundation for future discoveries of applications.

Several years ago, I debated this topic with Dare Obasanjo on Brad Wilson’s blog (I didn’t have my own blog at the time and at this point can’t find the link anymore). Now that I work at Microsoft and I’m a little older (and hopefully wiser), I realize that I was wrong and Dare had some great points. At the time, I was arguing that Microsoft’s R&D should be seen as productive in the near-term based on recent product developments, and Dare responded that in some of the products I cited that there was really very little connection to Microsoft Research output. This of course is the case in the research efforts that are aligned with basic research. My point here is that you can argue about whether or not Microsoft should invest in this kind of research, but we do and many other companies don’t. And you can argue about whether or not it is a business advantage to do so. Personally, I think it is. What is clear is that we’re investing more in research into new technologies than many competitors and all things being equal should have a greater opportunity to discover new technologies and apply them than will our competitors.

Through Microsoft Research, there are technology developments being explored that may not have a practical application for many years due to hardware, bandwidth or other environmental constraints but will radically change the industry one day. This kind of innovation is not possible without basic research and a strategic outlook- many companies wouldn’t invest in this way if there isn’t a short term return. Some research efforts will have a near-term impact and will become tied to major products like Windows or Office or other services. Some research efforts will have little impact and that’s the nature of research. Sometimes you come up empty. It is also likely that many external observers will never fully understand the contribution of the research efforts and how those are finally manifested in products. And yet the research effort keeps going and our customers will get the benefits. I think if people consider all of these factors that they’ll better understand our message around research and the company’s positive outlook.

Dell takes on “bloatware”

There is an interesting post from the Dell blog on “bloatware”. If you’re not familiar with the term, bloatware is the software that’s pre-loaded on the new PC that you buy that you’ll almost NEVER use. For those that haven’t really looked into it, bloatware is all about margins in the PC industry. While the costs of PCs go down, it is tough for the hardware manufacturers to compete at decent margins. Every PC that’s shipped to a new customer is a marketing vehicle for new software, and of course Dell gets paid through partnerships with software companies to distribute these programs on new PCs. These trial versions and enticements can lead to new customers for the software companies. Dell can use these offerings to give customers an option to more quickly purchase and/or upgrade a service on their PC, in essence providing a customer service.

Sounds like a win-win, right? Well, kind of. Michelle Pearcy of Dell writes, “For many Dell customers, having pre-loaded software that allows them to play back digital music, edit digital photos, and protect their new systems from viruses and spyware is a positive thing.   Does that mean all of our customers like it?  No.” Dell knows that most savvy consumers uninstall all of this software or reimage their PC entirely. Others simply delete the icons off their desktop and ignore the pre-installed software. Dell goes on to acknowledge that customers perceive that these “bloatware” programs cause performance issues but that isn’t likely to be the case based on their lab tests. While Dell ducks the issue to a degree and blames the “OS and security applications”, this is a good topic for them to discuss on their blog. While Dell was a corporate blogging nightmare not too long ago, they’re turning things around and doing a reasonable job of embracing this medium.

Donna at MSMVPS.com also points out some potential security issues with OEM system security combined with bloatware.

Soulard Idea Market coming August 8th, 2006

Matt is putting on an interesting new event called the Soulard Idea Market in a couple of weeks. Read his blog for details.

I think of the concept as an “evening retreat” for your brain. The goal is to engage in some (brain) stimulating activities, meet some new people, and come away with some ideas that you can build on all in the span of 3-4 hours. Matt and Dennis have quite a bit of experience in putting on different types of events and conferences so I’m looking forward to it.

If you’re in the St. Louis area and free on the evening of August 8th, I recommend that you check it out. The price is right (free or pretty close to it) and there should be lots of interesting people to meet. I’ll be there- hope to see you there as well.

PayPerPost policy updates

The launching of PayPerPost was initially seen as a boon for spam bloggers, blogging bots and scam blogs designed specifically to generate advertising dollars without any unique content or true audience. I posted my thoughts on PayPerPost a while ago as part of their offer to pay bloggers to do so. When I made my post, I fully disclosed what I was doing and waited to see what would happen. Following that post, it was approved and I’m due $10 later this month. My thoughts were, and still are, that this system, when properly disclosed, is a reasonable way for bloggers to make money and for advertisers to promote products. Still, many critics remained.

Today, there was an e-mail from PayPerPost on their recent updates to their policies regarding blogs from which they’ll accept submissions. As a result, they’re going to start implementing a ranking process for blogs to determine which blogs can take on which advertising offers. I think they’re getting close here- if they’d add some kind of disclosure to their process I’m sure that nearly all of the critics would go quiet. The PayPerPost blog commented on disclosure recently although they haven’t made any moves to require disclosure at this point. I’ve posted the letter here in its entirety:

Thank you for joining PayPerPost as a blogger. The first few weeks of PayPerPost have been nothing short of amazing and I thank you for your understanding as we grow. We will soon be implementing a slew of new features to better serve both you and our advertisers. Be on the look out for Beta 2 soon.

Today we updated our polices and usage agreement. We suggest you visit the site and review the terms. The biggest update of note is we will no longer be accepting blogs from blog for money advertising sites such as blogcharm, bloggerparty and writingup.com. Postings of this nature made from July 19th on will no longer be accepted. Previous posts will be honored and paid.

This issue revolves around quality. Remember, it is the advertiser who is putting money in your pocket. No advertisers…no money. Advertisers expect a quality post (positive or negative) on a quality blog that doesn’t exist solely to generate revenue. The Beta 2 version of PayPerPost.com will center around quality assurance. We will be ranking each approved blog posting based on quality of the post and the overall quality of your blog. Bloggers with higher quality rankings will eventually see more opportunities with higher payouts. Bloggers who consistently rank low will be automatically removed from the program.

Please do not confuse quality with content. You are still free and encouraged to speak your mind on the opportunities presented. We will be looking at the frequency of blog updates, the effort put into each posting, blog aesthetics and the comments others post on your blog. Our goal is to separate the true bloggers from the bots, spammers and no effort bloggers.

We appreciate your understanding as we make adjustments to the system. If you have any questions please direct them to this email address.

Regards,

Ted Murphy

Founder/CEO

The open sourcing of Java- significant move or too little, too late?

Recently there has been a discussion about the potential open sourcing of Java. Paul Krill of InfoWorld has written an article about how Java will now likely be open sourced in a series of phases. Krill writes, “Some components of Java that could be open-sourced in an incremental fashion include the Java virtual machine, the runtime environment, the Web services stack and the Swing GUI components. There has been some discussion about releasing the virtual machine, Swing, and the runtime at the same time… Sun voiced intentions to offer Java via an open source format at the JavaOne conference in San Francisco in May, but provided no timetable.”

I think that most reasonable people would agree that Sun really failed to capitalize on a major asset with Java in the 1990′s. There was really not a credible alternative for developing web-based applications, particularly for “enterprise” developers and Sun just didn’t effectively leverage Java to sell a Sun platform. As a result, the Java world is splintered now and Sun has refocused on its open sourcing of Solaris and new hardware offerings. With the potential open sourcing of Java, I still don’t see the benefit to Sun. They can gain some mindshare from open source advocates, but I’m not sure how they make Sun a strong company as a result. So I wonder if this move is really important or whether it is too little, too late.