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Microsoft Research and Development Expenses

The chart above shows the research and development expenses of Microsoft Corporation from 2010 to 2022 in USD billions. In 2022, the company spent $24.5 billion on research and development compared to $20.7 billion in the prior year.

Research and Development (R&D) expenses of Microsoft 2005-2022

Amounts are in millions.

YearMicrosoft R&D Expenses ($mn)
2022$24,512
2021$20,716
2020$19,269
2019$16,876
2018$14,726
2017$13,037
2016$11,988
2015$12,046
2014$11,381
2013$10,411
2012$9,811
2011$9,043
2010$8,714
2009$9,010
2008$8,164
2007$7,121
2006$6,584
2005$6,097

2022: Microsoft’s research and development expenses grew by more than 18% in 2022 compared to the prior year. The company spent $24.5 billion on R&D in 2022. During the previous year, its R&D costs had amounted to $20.7 billion.

2021: In fiscal 2021, the research and development expenses of Microsoft grew to $20.7 billion compared to $19.3 bilion in 2020. The company enjoyed solid growth in its revenues and net income in 2021 compared to the previous year where services drove most of the growth for the cloud technology and computing brand.

Microsoft’s revenues grew to $168.09 billion in 2021 compared to $143 billion in 2020. Net income of the company grew to $61.3 billion in 2021 compared to $44.3 billion in 2020. Its revenues from services grew to $97 billion in 2021 from $75 billion in 2020. However, the revenues from products increased only slightly to $71 billion in 2021 from $68 billion in 2020.


The Technology industry has grown highly competitive and brands are aggressively investing in new technologies for faster growth and higher revenue. Technology giants like Apple, Microsoft, Google and Amazon are especially focusing on bringing new technologies to market that are meant to drive the productivity of their consumers higher. Microsoft Research has made significant advances in the area of AI which it has infused in several of its products including Bing, Cortana, Holo Lens, Dynamics and Linked In to provide its customers with a  better experience.

In the technology industry, Research and development is a primary driver of growth and so most technology brands take it very seriously and spend billions on it. Apart from AI, Microsoft is investing in Research and Development in  Cloud computing and gaming. In 2017, Microsoft has invested 13 Billion USD in research and development which is one billion higher than the previous two years. In both 2016 and 2015, Microsoft had invested 12 Billion USD each in R&D. A big reason that Technology brands are continuously raising the bar in terms of investment in R&D is because it is necessary to continually improve the customer experience. In the recent years, Microsoft brought some great technologies that are being used by major industry players like Boeing to improve efficiency and customer experience.

2018 : During the first three quarters of the fiscal year 2018 ending March 31, Microsoft had spent 10.8 Billion (10, 793 Millions) on Research and development and this was around 1.3 billions higher than what it spent on R&D in the same period last year. In the first quarter alone the brand spent 3.7 Billion USD on R&D.

Sources:

Annual Reports of Microsoft 2004-2018

https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q3/press-release-webcast