Steve Cheney analyzes Apple’s R&D expenditures and acquisition pace:
Organic growth is the term coined for growing internally, not via merger or acquisition. Apple has embraced this strategy over its existence, averaging only about 1 acquisition per year during the past 25 years. In contrast — during the past four years alone — Microsoft bought 45 companies, Google 40, and Cisco 30.
Microsoft spent seven times as much as Apple on R&D over the past four years.
I saw this while working at Immunex – a well-designed and well-run company with a culture of innovation can beat larger, more well-funded companies every time.
Big Phama outspent us by a huge amount, and had many more people working on the same projects, yet we continued to get things done before them. Same with Apple.
It is possible to grow quite large and still maintain this culture. It helps tremendously if the guys at the top are not sales or marketing types, who generally seem to have no clue about rapid innovation and efficient management design.
Buying companies sucks away energy that could have been more efficiently used. It seems that MBAs think the mergers and acquisitions are the way to grow. Immunex did not think so and neither does Apple.