The document discusses industry-led R&D labs in Silicon Valley and keys to their success. It notes that few such labs have succeeded due to lack of direction, focus, and strong technical leadership. It emphasizes the importance of focusing R&D efforts on strategic areas aligned with companies' technology and product roadmaps. Well-run R&D labs contribute to the next few successful products and address technologies for the next 3-5 years. Measuring success based on products helped to create and innovate can indicate an R&D lab's impact.

1. A Perspective on Industry-led R&D Labs in the Silicon Valley
by
CK Toh, March 2016
__________________________________________________________________
Over the years, I have seen many labs opened by major companies in the Silicon
Valley. Sadly, few have succeeded because of lack of direction, focus, purpose, and
strong technical executive leadership.
Let me explain. The traditional model of sponsoring a center or lab with a top university
in the Bay Area may not have worked well because a university’s research tends to
be long term and focuses on fundamentals while industries are after products, market
share, and revenue. Breakthroughs are gems for university professors. Patents and
products are not. These conflicting values and interests do not seem to gel well.
Big corporations tend to have sufficient resources to establish their own R&D
(research and development) or D&D (design and development) labs. Some are
standalone entities while others are a unit within the corporation. Different laboratories
President will run them differently. While some have the luxury to do long term
research, others focus on strategic items that are aligned to companies' technology
and product roadmaps.
The areas of research to be undertaken could appear endless, as seen across a
horizon. Bearing in mind that resources are limited, it is better to hit a few targets hard
than trying to hit all and be diluted in all fronts. The fundamental science could be left
to universities and national laboratories while industry laboratories could focus on
down-to-earth science and technology that will impact the lives of zillions of people,
within the realizable life-time-resource frame.
The importance of aligning research areas with product roadmap cannot be
understated. To do something well, one needs to be focused. A company focusing on
servers and data center products should focus on compute, storage, and networking
technologies. A consumer device company should focus on the next killer device, be
it smart watch or smart TV.
In the past, we used to have labs that did the benchmarking of different technologies
and offer unbiased opinions. However, such labs are not in the many these days.
Benchmarking encourages race. Race encourages innovations, building best of the
best.
Nowadays, R&D laboratories tend to be the proto-type and experimental building
grounds for companies. Ideas could run wild but still clustered around the boundary of
the future product roadmap. That is the key to keep lab staffs "on the ground" while
dreaming for the stars. It is what that keep these folks "sane".
Apple's approach of not establishing a formal R&D lab entity but rather gathering
bleeding-edge technologies from various sources to bundle into their next generation

2. products, coupled with their own user interface design is different and seemed to be
working well.
Defense contractors have long been doing system integration work - bundling and
incorporating various technologies into a product, be it a fighter jet or warship.
Increasingly, "fusion" technology is needed for such products.
An R&D lab has a better and stronger purpose if it can contribute to the next few
successful products for the organization. N (current), N+1 (next year) and N+2
products should be done by product development teams. N+3 products and beyond
would best be addressed by a well stitched industry R&D laboratory. Based on market
competition and technology advances, doing N+3 to N+5 R&D makes good sense.
Anything beyond that period amounts to higher risks and uncertainty. If we look at ROI
(return on investment), a return or break even in investments after a 5-year period
tends to be considered "stretched". However, if successful, the return can be
exponential in nature.
To some innovators and engineers, not seeing success in 5 years tend to have
"breached" their patience and limits. If prolonged efforts cumulate to silence after 5
years, that may not be a good feeling to many. Co-incidentally, that is roughly the time
taken to produce a fresh breed of PhDs. Likewise, to investors, a lot of things could
happen in 5 years.
One way of measuring the success of an industry R&D lab can be based on the
number of successful products it has helped to start, create, and innovate. It is like the
first hundred yards cruising on the runway till the plane lifts. The rest is history. To the
R&D lab, that plane is a prototype. To the product team, that plane is enterprise-grade-
to-be. And to the sales team, that plane is the next killer product to sell.
In a nutshell, industry R&D labs will have to be focused, and aligned with product
roadmaps and market situation in order to have direct impact on its users and on the
company's well-being and business. A strong technology and innovation executive
(CTO, etc) will have to build clarity and focus, and getting just good resources (without
bankrupting or going into deep red) to propel a company’s offerings to the next leap,
possibly yielding a larger market share or disrupting the existing market and putting
competitors at bay. This executive will provide new fuel for the company's prosperity
and growth. He will get buy-in from CEO and major stakeholders on what to invest and
align it with the Product Chief, taking into consideration market factors from the Sales
Chief. Together, they keep the company afloat and well ahead in the rough seas.