More than half of IT companies expect to ramp up R&D expenditures through the summer, according to a recent Computing Technology Industry Association report. At a time of great turmoil in the telecom industry, an upswing in R&D spending indicates a renewed emphasis on innovation. So it’s a good sign that in the first quarter, some well-known IP gear-makers started increasing their R&D spend as the economy appeared to be stumbling toward recovery.
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| A lot more of these, please. |
For Sonus Networks, that means offshoring the R&D division. The Massachusetts-based vendor of IP telephony equipment said in its first-quarter earnings that R&D should be cheaper from now on because Sonus has moved its labs to India. Sonus Networks made that decision after slashing about 140 R&D jobs in the first quarter. Total R&D expenses went from $16.4 million to $14.9 million, even as Sonus reported a 52 percent surge in first-quarter sales. Part of that jump came from a new contract with a call-center software developer that bought SIP trunking and other tools. Sonus Networks said in a recent Securities and Exchange Commission (SEC) filing it should disburse more for R&D in fiscal 2010 than it did during the previous year, even taking into account the savings from the transfer to India.
At Tekelec, customer deals from previous quarters failed to translate into elevated first-quarter revenue, although the company expected contracts with BSNL and others to add to earnings later in the year. As a result, Tekelec found itself cutting R&D workers' compensation, along with the company's R&D budget. The company, which makes signaling gateways for service providers, stripped about $3.1 million from R&D, spending $22.8 million on research in the first quarter. Still, Tekelec put 20 percent of its revenue into R&D. Sales fell 1 percent, to $116 million.
