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Friday, February 11, 2005

Software Product and R & D Expenses

Tom Peters writes, Hummingbird hums saying, Hummingbird spends 19.6% of gross on R & D- Cool! Tom writes in the comments section -" wish more people were commenting on this. It's a "simple" post--but I think of the utmost importantance. (More worthy than the Carly flap)". I agree - here's my take:

This is an absoutely impressive reinvestment into building future business - I do not think that there are many companies comparable in size to Hummingbird investing this high a percentage in R&D. It would be more insightful if we get to know the absolute no - as a minimum threshold anyway needs to be spent and what is classified as R&D ,the distribution of this amount - in terms of what goes to maintain existing product line and what goes for future rollouts- a good indicator would be to understand how many new rollouts have happened in the past 3/4 years and how much business new version/products/service are getting as a percentage of existing business - That way we can related the effect of lead indicator like r&d expense to lag indicators like sale % of new product offerings.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"