- Latest News
- Comment & Metrics
- Magazine Articles
- Jason Stamper's Blog
- Open Source Blog
- Newsletter Sign-Up
- Trend Micro buries the hatchet
- Should you look at GAAP or non-GAAP?
- Getting off (on) the Cloud
- Getting off the Cloud
- HDS tapping UK storage demand
- SAP's support price rise has industry in a quandary
- IBM’s Ilog buy is a “non event” says rival
- Who’s fitter: drummers or footballers? Phil Collins vs. Ronaldo!
- Do Macs now rule the US desktop market?
- UK shops selling out of iPhone 3Gs
- Why did Tucci oust VMware's Diane Greene?
- The difference between ‘cloud computing’ and SaaS? None whatsoever.
- Iona bought by Progress Software
- Last few days of Windows XP sales...
- Lombardi talks on-demand BPM
- Lessons in ‘Enterprise 2.0’. Lesson 1: don't mention Enterprise 2.0.
- 10 ways to cut software development costs
- Would the baddest Roadrunner please step forward
- Artist's impression of new 3G Apple iPhone revealed
- Enterprise 2.0 Conference off to Web 2.0-style start
- CBR Dining Club speaker named EMEA analyst of the year!
- Numara claims service desk management rivals are "going backwards"
- Sinequa says Microsoft buying Fast is a boon
- ASG On Verge of Massive BSM Acquisition
- Compuware 2.0? Led Zeppelin? Am I dreaming?
- 100 most influential tech vendors: you have to be kidding
- BlackBerry Bold: RIM’s iPhone killer?
- The 20 most useless British gadgets of all time?
- De-dupe becoming part of storage fabric?
Jason Stamper's Blog
Are big tech firms better than small ones?
November 17, 2006
Is big necessarily better? Are a large vendor's products always superior to a small vendor's thanks to its ability to invest more in R&D? It's an interesting question, particularly in this age of rapid vendor consolidation.
Of course the simple answer is that it depends on which vendors you are talking about. But some research just out from management consulting firm Booz Allen helps to confirm this view, as it found no statistical relationship between R&D spending and sales growth, earnings, or shareholder returns.
The firm analysed the world's top 1,000 corporate research and development spenders using seven performance measures, from 2000 through 2005. It found that although R&D spending of these 1,000 companies rose last year by more than $20bn, "money simply can't buy effective innovation", as it puts it.
It found that 94 of the 1,000 companies consistently outperformed their industry rivals across a broad set of performance measures despite actually spending less on R&D than their competitors. These firms include some familiar names: Toyota, Apple, Christian Dior, Google and Caterpillar among them.
While the firm found no link between spending on R&D and financial performance, it noted that those 94 firms are generally noted for their distinctive skill in at least one element of what it calls the innovation process, and are adept across all of the stages. "Google is known for generating new ideas with blistering speed…. Apple is noted for its well-honed capabilities in project selection and customer understanding," the company said.
The message is that bigger is not necessarily better -- it's what you do with your R&D budget that makes the difference, whatever size it might be.
Comments
I've worked with a range of small through to very large tech firms and I currently work with a tiny software startup. Ironically, theirs is the most stable product I've ever delivered. In my experience, quality and company size are unrelated. What's necessary to quality is an understanding of what you are trying to build, and the ability to match the scope of your project to the resources you have. I would suggest that a good understanding of your product and resources is something that money doesn't always buy.
Post a comment
back to top