« Joenertia II | Main | General Motors »

March 19, 2005

M$FT

Microsoft spent $4.4 billion on research and development in the year ending June 30, 2001. $6.3 billion on R&D in the year ending June 30, 2002, $6.6 billion on R&D in the year ending June 30, 2003, and $7.8 billion on R&D in the year ending June 30, 2004.

Just what, exactly, is it doing? By and large, Word and Excel are the same programs they were when Wordperfect, Lotus, and Borland went down in the middle of the 1990s. Explorer is the same program it was when Navigator went down in the late 1990s. The mail and presentation programs are nice (perhaps), but. And there have been a lot of improvements to Windows: it doesn't crash any hour anymore, and the flaws that now have the Berkeley sysadmins on a search-and-destroy mission looking for installations of Windows 3.1, 95, and 98 by and large no longer exist.

What will users have to show for R&D expenditures that may crack $9 billion this fiscal year? What will shareholders have to show for this $9 billion. I know, they say "10% sales growth." But what would sales growth be if R&D were cut back to, say, $1 billion?

If anyone understands Microsoft as a business enterprise, I'd like to hear from them...


MICROSOFT FINANCIALS

All amounts in millions except per share amounts.
2003 2002 2001 2000
06/30/2004 06/30/2003 06/30/2002 06/30/2001
Net Sales 36,835.0 32,187.0 28,365.0 25,296.0
Cost Of Goods Sold 6,716.0 6,059.0 5,699.0 3,455.0
SG and A Expenses 13,306.0 9,988.0 8,095.0 5,742.0
R and D Expenditures 7,779.0 6,595.0 6,299.0 4,379.0
Income Before Depreciation and Amortization 9,034.0 9,545.0 8,272.0 11,720.0
Non-Operating Income 3,162.0 1,509.0 -397.0 -195.0
Other Income - - - -
Income Before Tax 12,196.0 11,054.0 7,875.0 11,525.0
Provision For Income Taxes 4,028.0 3,523.0 2,520.0 3,804.0
Income After Tax 8,168.0 7,531.0 5,355.0 7,721.0
Minority Interest - - - -  
Net Income Before Extra Items 8,168.0 7,531.0 5,355.0 7,721.0
Discontinued Operations - - - -375.0
Net Income 8,168.0 7,531.0 5,355.0 7,346.0

Posted by DeLong at March 19, 2005 11:55 AM