At Last, A Perspective on Gates' Departure Worth Reading (MSFT)

Jun.25.06 | About: Microsoft Corporation (MSFT)

After having nothing much worth saying ourselves and basically linking to what everyone else said, we finally found someone with not only a unique perspective on the issue, but one that is actually worth reading: Pip Coburn’s piece at AlwaysOn.

Pip believes Gates' announcement is bad news for Microsoft (NASDAQ:MSFT), because even though Gates doesn’t “get it” right now he is the only person who could make the company turn on a dime if he ever did “get it” - that is, what Microsoft needed to be on top again. We particularly liked his explanation of Microsoft’s overspending on R&D, which we consider significantly more eloquent than our own.

Pip writes:

Microsoft spends 16% of sales on research and development, compared to Apple’s 4%—and most would say that Apple has gotten more innovation for its comparative scant few dollars. Apple tends to surprise with products out of skunkworks, while Microsoft misses dates by a wide margin. Microsoft still seems addicted to countering criticisms of its lacking innovation for its monopoly power with a rebuttal that it spends more money on R&D than all other software companies combined—even though it hasn’t delivered results to Earthlings.Money doesn’t buy love or effective software development. If you want a ditch dug faster hire extra bodies, but not so with software development.

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MSFT 1-yr chart