Microsoft’s R&D edge: It outspent Apple 2.8:1 last year, a $6.4 billion difference

Microsoft’s R&D edge: It outspent Apple 2.8:1 last year, a $6.4 billion difference

Spend time around anyone from Microsoft research and you will notice several things all at once: They are happy, they love their job, and nothing they are working on will lead to a commercial product.

Well, that last one is only nearly always true.

I kid, but Microsoft has an enormous appetite to hire brilliant minds, and let them tinker, play, experiment, and just maybe, produce something that it can turn into a one billion dollar business. Obviously, I made up that figure, but you catch my jib’s cut.

Some figures: In its last quarter – Q1 of its fiscal 2013 – Microsoft spent $2.46 billion on research and development expenses. In fiscal 2012, it spent a total of $9.8 billion. In fiscal 2011 and 2010, the tally was $9.0 billion, and $8.7 billion. Obviously, if we round and annualize last quarter’s expense, the company is on track to spend around $10 billion this year, assuming no further expenditures increases.

Big sums, certainly.

Now, Apple just filed its year-ed report, which TNW tore into and through, mining the key bits so that you don’t have to read SEC filings. You are welcome. One of those interesting facts was the following:

Research and development expense was $3.4 billion, $2.4 billion, and $1.8 billion in 2012, 2011, and 2010, respectively. That’s an increase of $1B in the last year alone, its biggest ever.

Take those figures, and compare them to what Microsoft spends. The $1 billion shift is indeed massive on a percentage basis, when compared to Apple’s previous figures. However, Microsoft boosted its spend by $800 million last year, so Apple’s increased investment is certainly not wildly out of left field.

Keep in mind that Apple has higher revenues, profits, and cash on hand than Microsoft, despite spending just a fraction of its opponent’s sums on research and development.

What to make of this? That Microsoft’s R&D teams are slack and not worth a damn? Hardly. The Surface project could not have come together as it had without the pre-work of its various teams of researchers. And in technology, a field in which you either invent the future or it hangs you out to dry, having a few dreamers on staff certainly can’t hurt.

In its fiscal 2012 report, the company noted that “We plan to continue to make significant investments in a broad range of research and development efforts.”

So it’s pedal down for both Apple and Microsoft. Who knows, perhaps the PhD market in hard sciences will eventually tighten to the point that we start calling them rockstars too.

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