Place your bets on research

No reason to sugarcoat the Microsoft quarterly financial report issued this afternoon: it reflected the bad news in the overall economy.  Revenue down, earnings down, profits down. 

What I did find most interesting was the silver lining as Business Week points out in its coverage. Like most of Wall Street apparently (MSFT stock rose in after-hours trading), Business Week was impressed with some of the positive steps taken by the company:

Maybe the most striking news is Microsoft’s crisp cost-cutting. Who knew this Midas of the computer industry knew how to scale back so well? In the quarter, administrative costs fell by more than $1 billion, from $2.3 billion to $913 million. And the company completed its first ever general layoff, of 5,000 people. The company did not cut into its R&D budget, however. Spending there rose from $2 billion to $2.2 billion.”

It’s that last point that I’m focusing on, as it demonstrates that the company is living up to CEO Ballmer’s pledge to increase our annual R&D spending – amid this deep recession – from $8 billion a year to over $9 billion.

At a time when most budgets are hurting, that’s quite an investment.  If you’d like to know what we’re getting for that, check out http://research.microsoft.com, or for the most up-to-date reports, use Twitter to follow @MSFTResearch – this week, the Twitter feed has focused on papers and demonstrations we’re presenting at the 18th International World Wide Web Conference (WWW2009).

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Google’s Argument to Enterprise IT: “Trust Us”

FACT:  Yesterday, Google’s Dave Girouard, VP of enterprise sales, gave a keynote speech on “The Evolution of Cloud Computing” at FOSE, a Washington trade-show focusing on federal government and military IT customers.  According to a Washington Post reporter’s blog account afterwards:

[Girouard said] “Google will have to do things differently” to work with defense and intelligence agencies, where data security and privacy are held to the tightest standards. But he argued that having information spread across hundreds of different servers is actually more secure than housing data on a few servers at a specific location. “Security is now more virtual than physical,” he said.

ANALYSIS:  The Google salesman (Girouard is VP of enterprise sales) was speaking at FOSE on the same day I made an April Fools blogpost featuring a lame “Cloud Computing” joke (see it here, come back when you stop laughing).  

This year I’m at FOSE as neither buyer nor speaker; the past couple of years I spoke at FOSE, as a DIA official, and I always enjoy walking the exhibit floor, plus I was curious about Girouard’s take on Google’s current move into the federal space.

To be honest I’ve met him before when he was with Virage and he’s a fine fellow, a good salesman.

The rhetoric of his main pitch, though, seems to be battling uphill, and I’m not sure he gets a nuanced distinction.

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