Microsoft spends more on R&D than Google

This is true not only in absolute dollar term but also true as a percentage of revenue. In fact, Microsoft spends more on R&D among all the IT and software companies – in both absolute dollar terms as well as percentage of revenue.

Have a look at the data below. I have picked it up from a post in Infoworld by Ted Samson.

Revenue in billion US$

R&D Budget in billion US$

R&D Budget  as % of Revenue

Microsoft

62.5

8.7

13.92%

Oracle

35.6

4.5

12.64%

Google

29.3

3.7

12.63%

IBM

99.9

6.0

6.01%

Apple

65.2

1.8

2.76%

HP

126.0

3.0

2.38%

It was a surprised to see Oracle so high up in the list but I guess it may be a legacy from Sun. However, what is more surprising is to see Apple and HP spending so less on R&D.

I poked around a little to cross check the validity of the data – it appears indicatively accurate. In fact Microsoft R&D spending may be little understated. (See Microsoft R&D Spending, Comparative R&D Spending and Oracle R&D Spending).

Here is another chart from Business Insider which is based on 2009 data.

So, it would be foolish to write-off Microsoft in mobile. They have a habit of bouncing back and taking the lead after late start. Let us wait and watch where Microsoft will it be in ten years?

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ABC of Patenting – why, what and how

“No more than 1 in every 100 patent earns enough to pay back development cost and patent fees. About 1 in 500 makes any money above its out-of-pocket costs.” – Peter F. Drucker in Innovation and Entrepreneurship

If this is true then why do so many people file patent application? There are about 200,000 patents granted in US every year. (You can see this report from U.S. Patent and Trademark Office for more detail.)

4 Reasons why people file Patent

  1. Measure of R&D progress: For individual it can build your credibility. For a research lab in can be the ROI measure for the top management. For an organization it can have a positive influence on the brand.
  2. Proof of uniqueness & usefulness: Any product which is backed up by a patent has a higher perceived value.
  3. Defensive measure: You can file a patent to get protection from possible future litigation (see this). Alternately you can use patent to cross-license technologies. (see this)
  4. Startup valuation: Not just for startups, patents can push up valuation of any organization. Look at how Oracle is trying to leverage Sun patents against Google Android.

What can be patented?

The common theme is the emphasis on the invention being new and useful. This is where patenting differs from any academic publication where the emphasis is only on advancing the state of knowledge.

Patent rules differ from country to country.

  • In US: Almost anything can be patented as long as it is new – laws of nature, physical phenomena and abstract ideas cannot be patented – see this
  • In India: Software cannot be patented – you need a hardware component as a part of invention

Getting a patent in one country provides protection in that country only. That does not mean that you need to file patent in every country separately. PCT or Patent Cooperation Treaty is an international patent law treaty which provides protection in all the countries signatory to this treaty.

Important point: Patent is always granted to an individual.

Warning: You need to start the patenting process before you invention is shown to others. Anything that is already sold, published or presented to external audience is NOT patentable.

How to go about patenting?

Let me concentrate on the US patenting process.

  1. If you are in the field of IT, the patent will fall under the category of Utility Patent.
  2. You NEED a registered patent attorney – this is where you can find one – India has 6 registered attorneys (2 each in Bangalore, Hyderabad & Mumbai).
  3. There is a searchable patent database – you can search for granted patents as well as patent applications – you can glance through it and get an idea of what patents look like.
  4. Before you can proceed, you need to search the database and see if something similar has been patented – normally this search is done by your patent attorney.
  5. Once you are satisfied that your invention is new you have the choice of either filing for a provisional application which will allow a time of one year to make the final application.
  6. After you have filed the patent the average waiting time is 26 months for the USPTO sends you the first response.
  7. Once your patent is examined, USPTO in most cases will raise a set of objections which you have to counter – average time for this process is about 10 months after the first response.
  8. If you are able to successfully convince the USPTO the indeed your invention is new then you will be granted the patent – you have to pay the patent fee.
  9. You have to renew the patent after 3.5, 7.5 and 11.5 years.
  10. In India, it would cost you around US$ 20,000 in patent fee and attorney fee to get a patent processed.

The USPTO site has a nice dashboard which provides useful statistical information.

 

This is a simplified version of the patenting process as described in USPTO site.

Is HTML5 a game changer

To answer this question we first need to look at what way it is different from HTML4. Here are the salient features of HTML5 arranged in the order of importance (my opinion).

  • Offline working: Like Google Gears it allows mechanism for ensuring Web applications are available even when the user is not connected to their network.
  • Local storage: It provides for client-side SQL database to store structured data.
  • 2 way communication with server: For implementing games, chatting and remote control, web sockets API are available.
  • Rich Text Editor: It is like supporting a mini word processor with spell check and grammar check extension.
  • Drag and Drop: Has full support for drag and drop with access to computer’s native drag system and clipboard.
  • Cross-document messaging: It attempts to provide a secure method of exchanging messages pages of different domains.
  • Support for 2D drawing: There will be tags available for 2D vector graphics.
  • No media plug-in required: New audio and video elements will enable developers to embed and control multimedia content and Flash, Silverlight or JavaFX will not needed.

Here is a link to the draft standard.

What HTML5 proposes to do is to remove most of the programming limitations from the browser and allow any browser based application to be almost as powerful as any native client application. It would also allow us to take advantage on increasing processing power of the client machine and build richer applications – Moore’s Law, Performance and RIA.

One of the important facts we have to keep in mind is that though it will remain “work in progress” probably till 2022, all the major browsers have already started implementing specific features. Therefore, the impact will be felt over a period of time but we can say with reasonable confidence that …

  • …the importance of O/S on the client machine will go down
  • …it will be technically feasible to create an office suite of application which runs in a browser and is as powerful as a native office suite
  • …there will be less incentive to build native mobile applications (Mobile App or Mobile Web)
  • …it will be a fillip for the cloud provider (Cloud Strategy)
  • …most of the RIA plug-ins will become redundant

And the gainers and the losers are:

  • Adobe —-
  • Microsoft —
  • Apple +-
  • IBM +
  • Oracle +
  • Amazon ++
  • Google ++++

Here are some more useful links to HTML5 related sites: