I’m clearing out The Stack, and here are a couple of nuggets from the December 2004 Fast Company I’ve been meaning to blog about. The article focuses on Innovation (and the perceived lack thereof) at Microsoft
- Venture capitalists typically look at 50-100 deals to find a good $20 million investment. Microsoft, with its $6.8 billion R&D budget, would have to cover some 35,000 ideas to keep on the same pace.
- Google’s $1.5 billion in revenue would lift Microsoft’s top line by just 4%.
- In the software industry, a research project is considered successful if it produces 10-15% annual revenue growth. By this standard, Microsoft would have to create the third or fourth largest software company in the world each year to be considered innovative.
- From its $37 billion in annual sales, Microsoft generates $9 billion in cash flow and $8 billion in profit; that’s twice as operationally efficient as GE and better than twice as profitable as IBM.
- Microsoft spends $6.8 billion each year in R&D. IBM spends $5 billion. The annual R&D budgets of Oracle, HP, Dell, Apple and Sun combined are less than Microsoft’s.
That’s big.