By shifting its funding to an open and competitive process, HP hopes to increase its chances of "solving the world's most complex technology challenges," said Prith Banerjee, senior vice president of research at HP and director of HP Labs. "The traditional model of funding academic research," in which companies give money based on the general reputation of the institution, "is more like philanthropy," Banerjee said.

Earlier this year, HP announced a new approach to research, shifting its resources from a large number of small projects, each worked on by one or two researchers, to a smaller number of projects aligned around the companies five research themes.

To mitigate the risks of investing in a smaller number of projects, the company has instituted a research advisory board made up of equal representation from lab directors, technical contributors and business unit people. Each proposal is vetted on the basis of how likely it is to really advance the state of the art as well as generate business value. This early alignment of research with the business units will help to keep the research relevant to solving real customer needs, Banerjee said.

HP has also extended its research from two primary geographic locations—Palo Alto, Calif., and Bristol, U.K.—to include locations in China, Russia, India, Israel and Japan, and increased the number of labs from 12 to 23. In this way, the company hopes to gain access not only to the best talent in the world, but also to the research problems of emerging markets that can then be applied globally.

"This is innovation for the next billion customers," said Ajay Gupta, director of HP Labs India. It's going beyond the top 5 percent of early adopters in an emerging market to "the next 30 to 40 percent of the new consuming class." In India, for example, most people's first computer is a mobile device, he said. "We're figuring out in India how enterprises will connect to this new mobile consumer class."