To be sure, many of the 272 research projects named at Microsoft Research's Web site are structured with major product lines like Windows, Office or Xbox in mind. But many seem to have no likely application in anything the company sells today."We are growing outward into areas where computer science intersects with other disciplines, like AIDS research, computational biology, astronomy, earth sciences and the environment," Rashid says. "We are increasingly engaged where computer science is making a big difference in the way other sciences are done."

Asked about the trend toward outreach and collaboration, Rashid reels off a long list of global partnerships, many of them formed in the just the past two years: a joint lab with INRIA, the French national institute for research in computer science and control; a partnership with the University of Trent Center for Systems and Computational Biology in Italy; a partnership with the Barcelona Supercomputing Center in Spain that focuses on parallel distributed processing; the Microsoft-Intel Universal Parallel Computing Research Centers at the University of California at Berkeley and the University of Illinois at Urbana-Champaign; the Microsoft-sponsored Center for Computational Thinking at Carnegie Mellon; the partnership with Georgia Institute of technology at the Institute for Personal Robots in Education; the partnership with universities in the Latin American Collaborative Research Federation; and the annual Microsoft Research Faculty Summits.

Universities shift focus, too

Those kinds of partnerships, at Microsoft Research and elsewhere, have been spurred in part by a shift in thinking on university campuses, where working with corporations was once viewed as somehow crass and unworthy. "The model you'll see going forward," Chesbrough says, "is for universities and their leaders to become much more skilled and comfortable working with companies, and it will be much deeper partnerships."

For example, HP is working with the Real-Time Computing Laboratory at the University of Michigan to develop algorithms for the dynamic allocation of resources -- such as CPU cycles, memory and bandwidth -- across applications in virtual environments in order to meet specified service level objectives.

Kang Shin, a computer science professor and the founding director of the lab, says the university is well suited to provide the theoretical and mathematical underpinnings for the algorithms, but it lacks the real-world experience and the huge testbed -- up to 50,000 servers in a data center -- that HP brings.

"We work side by side with HP, and we write papers together," Shin explains. "We work together so that we define real problems, not nonproblems. I think that's more important than the money we get from HP."

Despite all the advantages, there are some downsides to open innovation, Chesbrough acknowledges. "A software company from the early 1990s called Go Corp. lost its pen-based computing operating system intellectual property and market position by sharing too much with Microsoft," he recalls. "However, most companies I have encountered are, if anything, overly aware of these risks and use these risks to excuse themselves from opening up their innovation process."

To Chesbrough's mind, that's a mistake. "The many successful stories of companies adopting open innovation show that you can be more open without giving everything away."