Today's argument, in the wake of HP's slashing of its Q3 R&D budget by $228 million, is that research spending means vastly different things depending on which company you're talking about. For Apple, it's its lifeblood, leading to the next out-of-left-field innovation. For Microsoft, there's likely less lab and more cranking out of Windows 7 code. At Intel, R&D is intimately interwoven into company's DNA. Which leads to the logical question: What is it at HP?

I got to thinking about the subject of R&D spending recently, because the question very much in the air now is whether an economic downturn is the time to cut the very research funding, which conventional wisdom tells us positions a business to succeed when the rebound comes. Yet the more I thought about it, the more I realized that this line of thinking is so simplistic it misses the point.

First off, few companies are completely gutting R&D. Yes, some are trimming it as part of overall cost-control strategies. Others are re-envisioning it, as HP appears to be doing by shifting some of its centralized idea-germination processes to a more open "crowdsourcing" model. This, of course, takes a page from Google, where employees are allowed to devote 20% of their time to wandering hither and thither on Segways, in hopes that Newtonian apples will hit them upside their collective Googly heads.

It's also important to note that periodic lab revamps are nothing new, as when IBM Research famously told its scientists that their work had to be more closely connected to actual products. Or -- the ultimate Ph.D. downer -- when Bell Labs began its tech bubble-driven devolution into the clutches of Alcatel-Lucent.

OK, so let's take these bullet points -- bucks and research processes -- one at a time.

Follow The Money

My initial feeling that HP CEO Mark Hurd was the villain here was -- incorrectly, I later discovered -- stoked by an August 5 Reuters article I came across, entitled Tech firms still spending on R&D despite downturn. Here's the money quote:

"For Intel Corp., Microsoft Corp., Oracle, Texas Instruments, and other tech heavyweights grappling with sliding revenue, R&D expense made up a larger percentage of sales than last year. At famed innovation houses Google Inc and Apple Inc -- where sales are still rising -- R&D spending in the latest quarter actually outpaced that growth."

However, once I investigated the numbers, two interesting facts quickly became apparent. First, all of those companies are indeed spending lots on R&D, though some have trimmed those budgets recently. Second, HP's allocation isn't out of the ballpark from what similarly sized tech stalwarts are spending.

Here are some quick numbers:

Microsoft

For its full 2009 fiscal year (ending June 30, 2009), Microsoft's R&D spending was actually higher than in 2008 -- $9.010 billion versus $8.164 billion in 2008. Of course, this is because some of the costs of Windows 7 development falls under R&D, though you or I might properly think of this as a normal product-development expense, rather than future-directed research.

Intel

In 2008, Intel spent $5.722 billion total on R&D. For the first half of 2009 (six months ending June 27), Intel spent $2.62 billion on R&D (version $2.935 in first half 2008.) So you could extrapolate from this that full-year 2009 R&D will come in around $5.1 billon (noting that the 2008 full-year figure was not quite double the six month total, meaning there's some budget trim at year's end).