Expansion of Microsoft Research—Analysis and Download of 1997 Plan

“We are about to embark on a nearly unprecedented adventure—expanding Microsoft’s investment in research by at least a factor of three.“

So begins the May 1997 memo written by Nathan Myhrvold, architect of Microsoft Research (MSR), a little over five and a half years after the renowned research organization was created. The memo, labeled Microsoft Confidential, marked a new phase in the evolution of what has arguably become the world’s leading corporate research organization in software and computing—signaling its move from a one-off lab into the global organization it is today, boasting some 1,100 scientists and engineers in seven research labs and five other tech centers around the world.

The early MSR had tasted success, and it wanted more. As Myhrvold (he ultimately rose to chief strategist and CTO at Microsoft before founding Intellectual Ventures in Bellevue, WA) continued in the memo’s opening paragraph: “A few years [ago] some of us were fortunate enough (and naïve enough) to participate in the adventure of expanding our research by an infinite factor—from zero to something. That something has been incredibly successful, to the point that we now want to create something larger still.”

The 1997 memo (a PDF of the entire 14-page memo is below) can be seen as the sequel to Myhrvold’s 1990 memo and PowerPoint presentation that convinced Bill Gates and other Microsoft executives to create the research lab in the first place: the lab officially launched in September 1991 and will celebrate its 23rd anniversary this fall. (You can find a PDF of that 21-page 1990 memo here, along with my detailed analysis. And here is Myhrvold’s original presentation and my shorter analysis.)

I have been meaning to write this sequel for a while now. It has become even more top of mind, though, given the July 10 e-mail from new Microsoft CEO Satya Nadella to company employees. The memo emphasized the company’s business focus on mobile and the cloud. It referred to impending engineering and organizational changes—the company announced its biggest layoff in history on Thursday—and the imperative of innovation and “reinventing productivity.” But while Nadella cited many products and areas in which MSR has long been involved, he made no mention of the research organization itself or more basic research in any form. I don’t want to read too much into one communique. However, given some changes at MSR over the past year under new director Peter Lee to connect the organization better to business needs—changes sure to accelerate under the new CEO—it seems clear that overall time horizons of research projects are likely to shrink.

The opposite was being contemplated when Myhrvold wrote his 1997 memo. That is, while MSR had focused from day one on building ties to the company’s product groups, nearly six years into the effort Myhrvold felt the need to at least consider looking farther out and conducting more fundamental research. And while he ultimately rejected most of this idea, the lab did indeed expand its horizons in the years ahead (see last section for more on this).

We’ll dive into the memo to better understand how things have changed—but first some context. When he conceived of MSR back in 1990, Myhrvold headed Advanced Technology and Business Development for Microsoft and was just trying to get a small research lab off the ground. He proposed forming several research groups of five to 10 people each, growing to a total headcount of 30 in the first year, 50 during the second year, and 60 after three years. Among the very first hires was research director Rick Rashid, a star computer scientist from Carnegie Mellon University who would lead MSR until July of 2013, when he turned over the reins to Lee. (As part of the transition, Rashid, a senior vice president, joined Microsoft’s Operating Systems Engineering Group). Other initial recruits included minicomputer pioneer Gordon Bell, now a researcher emeritus at the organization, and three linguistic and natural language stars from IBM Research: Karen Jensen, Stephen Richardson, and George Heidorn.

I could find nothing in the original proposal that envisioned a much bigger organization—although, knowing Myhrvold, that must have been in his mind from the start. By 1997, in any case, he and Rashid had decided the time was right to make MSR much more of the hallmark research organization it is today.

I invite you to read the full memo for yourself. But below I have highlighted what I see as key parts of the document, and included some commentary that I hope is helpful in contemplating the evolution of Microsoft and its place in the annals of computing and software R&D.

Ideas for Our Research Agenda

Top 3 Goals (pp. 1-2)

While decrying mission statements, Myhrvold laid out three main goals of the planned expansion:

 Create the premier software research institution in the world.

Invent the critical technologies to carry computing through the early 21st century.

Drive technology into Microsoft products, and help our company remain preeminent in its field.

“So, to be clear about it, I want to do all … Next Page »

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Bob is Xconomy's founder and chairman. You can email him at [email protected] Follow @bbuderi

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