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Value of R&D


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I've been trying to wrap my head around the underlying value of research and development for Saas companies and was wondering if anyone could shares their thoughts.


Alphabet, Amazon, and Microsoft are big spenders in this area, but how much is overspend and how much is worth every penny (16%, 13%, and 13 of sales respectively)?  Does a hundred-plus-billion dollar mcap company spend R&D more wisely than a smaller one? 


This question reminds me of the Ballmer years at Microsoft during which so many great ideas were trashed. 


That said, any technology company worth its salt will spend more than 10% on R&D. 


From another angle, and looking down the chain, companies like Atlassian and Hortonworks are spending say 40% of sales on R&D.


These two companies, despite developing very different applications, might pose as a couple interesting examples where high R&D spend relative to sales might contradict themselves in light of market valuation (then again maybe Hortonworks isn't really "hot")? 


Capitalizing R&D over time is not fair, but calling it an expense is not fair either...


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