This reads like something written word for word by IBM PR. It is also woefully misinformed. For instance:
The goal . . . was to build a profitable business with a lot of recurring revenue, based on service contracts and software licenses. . . . Over the last 10 years, Apple has embraced much of the same strategy — in broad strokes.
Even in broad strokes Apple's strategy is completely different. Apple makes money in selling vertically integrated products directly to consumers. The vast majority of Apple's income comes from when someone pays for the gadget (hardware) at purchase time. IBM relies heavily on support contracts and consulting work continued income, or as this journalist puts it, "recurring revenue."
At I.B.M., the inspiration engine is more subtle and conceptual. In late 2008, Mr. Palmisano and his team settled on a theme: the deployment of scientific research and technology to tackle big challenges for business and society . . . . And the company has spent hundreds of millions of dollars on its “Smarter Planet” advertising campaign.
A marketing campaign is a sign of IBMs "subtle and conceptual" inspiration engine? To me IBM's campaign represents the worst of contentless corporate advertising. No actual products named, no concrete facts, just feel-good "we're smart and serious" messaging. A lot like those wonderful full page ads in magazines by Shell or BP saying "don't worry, we really love renewable energy." Apple's advertising campaigns always center around actual products, what they do, what they stand for, why you want them. Once again, a far cry from "a series of conversations for a smarter planet."
Apple, by contrast, focuses only on product innovation, not scientific invention.
I would have to say that this is because the rate of innovation is so terrific, anything 5 years behind the innovation curve is only just beginning to become stable enough for mass production. A good example is the unibody process Apple rolled out. Sure, it's not exactly the newest technique to build something, but it was pretty new to use it to build consumer laptops.
Also I think that Apple's focus is really just the smarter thing to do. Basic R&D rarely ever seems to benefit those doing the research.
And as you note, in the computer industry cutting edge products are effectively cutting edge research projects. This isn't like the hammer industry where you can ship a 20 year old hammer design. And this shows at academic conferences where industry presentations on shipping products are often the best attended talks.
It depends on how basic you mean, but Intel has arguably made a successful career out of doing basic R&D. They invent new fab processes and so on, rather than just building chips out of off-the-shelf technology, which is one of their main competitive edges.
But fab processes are just about their core business. You can't build chips out of OTS technology. And the only way to do 22nm chips requires research to do it. But it is focused research, in the same way Apple focuses.
Unfocused research is like the stuff IBM does for teleportation. Very cool, but will not make them any money. And frankly is probably better suited to be done in academia or by the gov't.
Best CS research group in the world. Have added very small incremental value to MS as a company.
The two issues, as I see them are:
1) MS is really slow productizing MS Research innovations. I think part of the problem is that MS imposes a higher bar on "product quality" for things that come out of research than things that come out of the product groups.
Had the iPhone multi-touch on a phone UI come through MSR it would have taken MS 5 years to productize it. Apple did it in 18 months.
2) A lot of MS Research appears to be done in a vacuum (with respect to Microsoft, not with respect to the research community). I think Live Labs was a reaction to that. But frankly, I think having this separate research units don't work. Rick Rashid has no ability to really get Steve Sinofsky to do anything.
The research group needs to be part of the product teams. The research teams should be tiger teams attacking problems with the express goal of integrating back into the product along a certain time horizon. Everyone needs to be invested in their success -- both the core product team and this tiger team (and note, the tiger team shouldn't be a distinct team... at various points, different members of the product team are a part of it, depending on the task at hand).
The MS research model I think is becoming dated. The amazing thing Google did is to get top-flight researchers and faculty members working on writing code that ships, even if it is Javascript and PHP.
(Disclosure: I interned at MSR over the summer. These are my personal opinions.)
Note that MSR is a basic research organization, not a so-called "R&D" unit. MSR is largely focused on academic research -- there seems to be an implicit mandate that 99% of MS research output will "fail" and not be productized. For instance, I can't imagine a Visual Haskell Professional coming out in the next ten years -- or ever, really.
However, there's definitely a huge value in academic research qua academic research, particularly in CS theory. MSR has algorithms, crypto/applied math and software engineering research groups that do top-notch academic work, and it would be a great loss to the CS world were any of them shut down just because they don't productize enough.
An ancillary benefit of MSR is that it improves Microsoft's reputation in the traditionally pro-Linux academic world.
The goal . . . was to build a profitable business with a lot of recurring revenue, based on service contracts and software licenses. . . . Over the last 10 years, Apple has embraced much of the same strategy — in broad strokes.
Even in broad strokes Apple's strategy is completely different. Apple makes money in selling vertically integrated products directly to consumers. The vast majority of Apple's income comes from when someone pays for the gadget (hardware) at purchase time. IBM relies heavily on support contracts and consulting work continued income, or as this journalist puts it, "recurring revenue."
At I.B.M., the inspiration engine is more subtle and conceptual. In late 2008, Mr. Palmisano and his team settled on a theme: the deployment of scientific research and technology to tackle big challenges for business and society . . . . And the company has spent hundreds of millions of dollars on its “Smarter Planet” advertising campaign.
A marketing campaign is a sign of IBMs "subtle and conceptual" inspiration engine? To me IBM's campaign represents the worst of contentless corporate advertising. No actual products named, no concrete facts, just feel-good "we're smart and serious" messaging. A lot like those wonderful full page ads in magazines by Shell or BP saying "don't worry, we really love renewable energy." Apple's advertising campaigns always center around actual products, what they do, what they stand for, why you want them. Once again, a far cry from "a series of conversations for a smarter planet."