March 19, 2005
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...
|All amounts in millions except per share amounts.|
|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|
|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|
|Net Income Before Extra Items||8,168.0||7,531.0||5,355.0||7,721.0|
Posted by DeLong at March 19, 2005 11:55 AM