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. IBM The 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 Net 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 Fears?
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
research.microsoft.com/~gray/talks/NRC_Research_Investment.ppt