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R&D Trends in The Information Industry

Explore the shifting landscape of R&D investment in technology centers, value-added software, and the rising prominence of "commodity" sectors. Dive into the impact on industry spending, venture capital funding, and the future outlook for research and development.

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R&D Trends in The Information Industry

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  1. R&D Trends in The Information Industry Jim Gray Microsoft Research Jim Gray NRC panel 2/9/98

  2. Thesis • Investment in R&D is shifting to • Technology centers (e.g. Intel) • Value added software (e.g. SAP) • “Commodity” is an increasing part of Industry • That part spends almost zero on R&D • Total spending on R&D is rising • Huge venture capital funding • Huge investments by Technology and Software companies. Jim Gray NRC panel 2/9/98

  3. IBMThe Classic Computer Company • R&D is 6% • Was 12% in the past Jim Gray NRC panel 2/9/98

  4. The New Computer Company • 10% R&D or 2% R&D: • which is the future? Jim Gray NRC panel 2/9/98

  5. New Points In Spectrum • EDS: never mentions R&D in Annual Report • Intel spends heavily on R&D Jim Gray NRC panel 2/9/98

  6. Software Companies are R&D Intensive • 15% of revenues is typical Jim Gray NRC panel 2/9/98

  7. Microsoft Research • A strange case • A young organization • Attracts people who want to have impact • Co-located with development organization • Developers have embrace-and-extend mind set • Microsoft is in the “feature” business. • Net • There is a very strong technology transfer story. • Handsome payoff to investment so far. Jim Gray NRC panel 2/9/98

  8. But Still • Microsoft is doing long-term research on • Speech recognition and synthesis • Language understanding • Vision & Graphics • Programming language fundamentals • Decision theory • and recently: mathematics and statistical physics. Jim Gray NRC panel 2/9/98

  9. The Future • Research funding is projected to grow 3x in 3 years • researchers about 5% of developers (wild guess) • Research is open (minimal NDAs and such) • There is a sense of optimism • Endless frontier • Increasing our support for university research. Jim Gray NRC panel 2/9/98

  10. Specific Questions • University cooperation: • Done at a per-researcher level (not grand program) • Very effective • Usefulness of University Research: • Students are wonderful • Slow to respond to change (e.g. Internet, Windows,.. • Focus on micro-problems, not systems or integration • This seems inherent in the university system. • IP issues are minor for us so far Jim Gray NRC panel 2/9/98

  11. Specific Questions • Government funding • DARPA appears to be broken for CS. • Funding seems to focus on Iron, not Software • e.g. ExaFlops not great apps or middleware • Cost of grantsmanship seems extra-ordinary • Government never had great vision (MITI, …) and still does not. • Fears? • No, I am optimistic that VCs and Industry will do great things • The system is working! Jim Gray NRC panel 2/9/98

  12. Thesis • Investment in R&D is shifting to • Technology centers (e.g. Intel) • Value added software (e.g. SAP) • “Commodity” is an increasing part of Industry • That part spends almost zero on R&D • Total spending on R&D is rising • Huge venture capital funding • Huge investments by Technology and Software companies. Jim Gray NRC panel 2/9/98

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