Table:
| Year Ended December 31, |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  | % Change vs. Prior |  |
| Year | 2019 | 2018 | 2017 | 2019 | 2018 |
| (in thousands) |  |  |  |  |  |
| Research and development | $ 87,608 | $ 71,896 | $ 57,704 | 22% | 25% |
| Sales and marketing | 56,860 | 51,262 | 47,482 | 11% | 8% |
| General and administrative | 64,603 | 52,618 | 46,054 | 23% | 14% |
| Depreciation and amortization | 7,987 | 8,613 | 9,060 | -7% | -5% |
| Restructuring charge | - | - | 2,921 | NA | -100% |
| Operating expenses | $ 217,058 | $ 184,389 | $ 163,221 | 18% | 13% |
Paragraphs:
Research and Development Our principal research and development (R&D) activities during 2019, 2018 and 2017 focused on the expansion and integration of new products and releases, while expanding the product footprint of our software solution suites in Supply Chain, Inventory Optimization and Omnichannel including cloud-based solutions, point-of-sale and tablet retailing. For 2019, 2018 and 2017, we did not capitalize any R&D costs because the costs incurred following the attainment of technological feasibility for the related software product through the date of general release were insignificant. Our principal research and development (R&D) activities during 2019, 2018 and 2017 focused on the expansion and integration of new products and releases, while expanding the product footprint of our software solution suites in Supply Chain, Inventory Optimization and Omnichannel including cloud-based solutions, point-of-sale and tablet retailing. For 2019, 2018 and 2017, we did not capitalize any R&D costs because the costs incurred following the attainment of technological feasibility for the related software product through the date of general release were insignificant. Our principal research and development (R&D) activities during 2019, 2018 and 2017 focused on the expansion and integration of new products and releases, while expanding the product footprint of our software solution suites in Supply Chain, Inventory Optimization and Omnichannel including cloud-based solutions, point-of-sale and tablet retailing. For 2019, 2018 and 2017, we did not capitalize any R&D costs because the costs incurred following the attainment of technological feasibility for the related software product through the date of general release were insignificant.
Our principal research and development (R&D) activities during 2019, 2018 and 2017 focused on the expansion and integration of new products and releases, while expanding the product footprint of our software solution suites in Supply Chain, Inventory Optimization and Omnichannel including cloud-based solutions, point-of-sale and tablet retailing.
For 2019, 2018 and 2017, we did not capitalize any R&D costs because the costs incurred following the attainment of technological
feasibility for the related software product through the date of general release were insignificant.
Year 2019 compared with year 2018 R&D expenses primarily consist of salaries and other personnel-related costs for personnel involved in our research and development activities. Research and development expenses in 2019 increased by $15.7 million, or 22%, compared to 2018. This increase is primarily due to a $10.6 million increase in compensation and other personnel-related expenses, $3.0 million increase in performance-based compensation expense, and $1.7 million increase in computer infrastructure costs, resulting from increased headcount to support R&D activities.
Year 2018 compared with year 2017
Research and development expenses in 2018 increased by $14.2 million compared to 2017. The increase is primarily attributable to
an $8.9 million increase in compensation and other personnel-related expenses, resulting from increased headcount to support R&D
activities, a $4.0 million increase in performance-based compensation and a $0.7 million increase in computer infrastructure costs.
Sales and Marketing Year 2019 compared with year 2018 Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased by $5.6 million, or 11%, in 2019 compared to 2018, primarily due to a $4.9 million increase in performance-based compensation expense and a $2.5 million increase in compensation and other personnel-related expenses, offset by a $1.9 million decrease in marketing related expenses. Year 2019 compared with year 2018 Sales and marketing expenses include salaries, commissions, travel and other personnel-related costs and the costs of our marketing and alliance programs and related activities. Sales and marketing expenses increased by $5.6 million, or 11%, in 2019 compared to 2018, primarily due to a $4.9 million increase in performance-based compensation expense and a $2.5 million increase in compensation and other personnel-related expenses, offset by a $1.9 million decrease in marketing related expenses.
Year 2018 compared with year 2017 Sales and marketing expenses increased $3.8 million in 2018 compared to 2017, due primarily to an increase of $2.9 million in marketing and campaign programs, a $1.1 million increase in performance-based compensation and a $0.7 million increase in compensation and other personnel-related expenses, partially offset by a $2.0 million decrease in commissions expense as we must defer a portion of our sales commission expense and amortize it over time as the corresponding services are transferred to the customer under ASC 606. Sales and marketing expenses increased $3.8 million in 2018 compared to 2017, due primarily to an increase of $2.9 million in marketing and campaign programs, a $1.1 million increase in performance-based compensation and a $0.7 million increase in compensation and other personnel-related expenses, partially offset by a $2.0 million decrease in commissions expense as we must defer a portion of our sales commission expense and amortize it over time as the corresponding services are transferred to the customer under ASC 606. Sales and marketing expenses increased $3.8 million in 2018 compared to 2017, due primarily to an increase of $2.9 million in marketing and campaign programs, a $1.1 million increase in performance-based compensation and a $0.7 million increase in compensation and other personnel-related expenses, partially offset by a $2.0 million decrease in commissions expense as we must defer a portion of our sales commission expense and amortize it over time as the corresponding services are transferred to the customer under ASC 606.
Sales and marketing expenses increased $3.8 million in 2018 compared to 2017, due primarily to an increase of $2.9 million in marketing and campaign programs, a $1.1 million increase in performance-based compensation and a $0.7 million increase in compensation and other personnel-related expenses, partially offset by a $2.0 million decrease in commissions expense as we must defer a portion of our sales commission expense and amortize it over time as the corresponding services are transferred to the customer under ASC 606.
General and Administrative Year 2019 compared with year 2018 General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other
Year 2019 compared with year 2018
General and administrative expenses consist primarily of salaries and other personnel-related costs of executive, financial, human resources, information technology, and administrative personnel, as well as facilities, legal, insurance, accounting, and other administrative expenses. General and administrative expenses increased $12.0 million, or 23%, in 2019 primarily attributable to a $8.9
million increase in compensation and other personnel-related expenses resulting from increased headcount, a $1.9 million increase in performance-based compensation expense, and a $1.1 million increase in computer infrastructure costs.
Year 2018 compared with year 2017 General and administrative expenses increased $6.6 million in 2018 due primarily to a $3.6 million increase in compensation and other personnel-related expenses and a $2.4 million increase in performance-based compensation.
Depreciation and Amortization Depreciation and amortization of intangibles and software expense amounted to $8.0 million, $8.6 million, and $9.1 million in 2019, 2018 and 2017, respectively. Amortization of intangibles was immaterial in 2019, 2018 and 2017. We have recorded goodwill and other acquisition-related intangible assets as part of the purchase accounting associated with various acquisitions.
Depreciation and amortization of intangibles and software expense amounted to $8.0 million, $8.6 million, and $9.1 million in 2019, 2018 and 2017, respectively. Amortization of intangibles was immaterial in 2019, 2018 and 2017. We have recorded goodwill and other acquisition-related intangible assets as part of the purchase accounting associated with various acquisitions.
Restructuring Charge In May 2017, we eliminated about 100 positions due primarily to U.S. retail sector headwinds, aligning services capacity with demand. We recorded a restructuring charge of approximately $2.9 million pretax ($1.8 million after-tax or $0.03 per fully diluted share). The charge primarily consisted of employee severance, employee transition costs and outplacement services. The charge is classified in “Restructuring charge” in our Consolidated Statements of Income.
In May 2017, we eliminated about 100 positions due primarily to U.S. retail sector headwinds, aligning services capacity with demand. We recorded a restructuring charge of approximately $2.9 million pretax ($1.8 million after-tax or $0.03 per fully diluted share). The charge primarily consisted of employee severance, employee transition costs and outplacement services. The charge is classified in “Restructuring charge” in our Consolidated Statements of Income.
Operating Income
Operating income in 2019 decreased $18.0 million to $115.9 million, compared to $133.9 million for 2018. Operating margins
were 18.8% for 2019 versus 23.9% for 2018. Operating income and margin decreased primarily due to our commitment to
strategically invest in a business transition to a cloud first company focused on delivering long-term sustainable growth and earnings
leverage. As a result, we are investing significantly in R&D to deliver new innovation, cloud operations headcount, infrastructure and
technology to support our ability to scale our cloud business to achieve our growth objectives. In addition, our innovation releases have fueled strong demand for our global consulting services and we are actively hiring to fulfill customer demand, which pressures operating income and margins until new resources ramp to full utilization. Finally, our performance-based compensation expense has increased over the prior year based on strong execution against target objectives. In 2019, operating income in the Americas segment decreased by $18.9 million and remained relatively flat in the EMEA and APAC segments.
Operating income in 2018 decreased $51.7 million to $133.9 million, compared to $185.6 million for 2017. Operating margins were 23.9% for 2018 versus 31.2% for 2017. Operating income and margin decreased primarily as a result of our investment in cloud transition combined with lower license revenue. The operating income decrease in the Americas, EMEA and APAC segments was
$39.1 million, $9.4 million and $3.2 million, respectively.
Question:
What is the change in research and development cost between 2019 and 2018?
Answer: $87608-$71896 = 15712