Stephen Elop Would Pull a Nokia On Microsoft 292
Nerval's Lobster writes "A new Bloomberg report suggests that Stephen Elop, who's apparently on the short list of candidates to replace Steve Ballmer as Microsoft's CEO, would eliminate company projects such as Xbox and Bing while focusing resources on Office. Before he left Microsoft to join Nokia, Elop headed Microsoft's Business Division, so it's no surprise he'd want to focus on Office and the company's other, highly profitable enterprise software. But as head of Nokia, Elop made similarly bold strategic realignments that, while they probably looked good on paper, didn't quite work out. Specifically, Elop decided to abandon Nokia's popular homegrown operating systems, including Symbian, in favor of Microsoft's Windows Phone. That caused Nokia's share of the overall mobile-device market to dive into the single digits. At the time, Elop insisted he made the decision because Symbian and its ilk were incapable of competing in the broader market against Android and iOS; revelations by the Finnish media over the past few months, however, suggest that he'd been offered a generous cash incentive for selling off the company, which gives his 'strategic realignment' (which everyone knew would initially collapse Nokia's market-share, as its product pipeline emptied out) a whiff of self-interest. So while it's likely that a Microsoft run by Elop would make some decisive moves, his previous attempt at game-changing quickly transformed Nokia from a communications powerhouse into a second-tier competitor and (eventually) a Microsoft subsidiary. And by eliminating Bing and Xbox, Microsoft would be giving up completely on the search and gaming markets in favor of becoming more of an enterprise-centric company—something that could please analysts mostly interested in the company's bottom line, but basically an admission of defeat in the consumer realm."
Wait. What? (Score:5, Insightful)
So the plan is he'll gain stewardship of Microsoft and hand it over to... Microsoft?
Seems a bit redundant
Oh right we're going to pretend Elop wasn't an infiltrator sent to hasten the ripening of a patent laden company down on it's luck
He might. (Score:4, Insightful)
He sinked his own company once, he could do it again. But why? I mean, even slashdot had realized Elop was working for microsoft all along, whom would he work for now? Is google planning to buy microsoft? apple? the NSA?
Yeah right (Score:5, Insightful)
Blackberry stuck with their own stuff, which was even relatively entrenched in the enterprise... a lot of good it did them.
Symbian, really? (Score:5, Insightful)
incentives redux (Score:4, Insightful)
Article: ... they probably looked good on paper, didn't quite work out. Specifically, Elop decided to abandon Nokia's popular homegrown operating systems, including Symbian, in favor of Microsoft's Windows Phone.
Depends on what you mean by "didn't work out."
That decision didn't work out for Nokia but apparently worked out real well for Elop himself.
Time for focus (Score:4, Insightful)
Trimming the fat would probably be better for Microsoft at this point. They are trying to dance in too many rodeos, and it's starting to show. Focus on Enterprise, Windows, and Office products. That's a really strong foundation for them. If they want to stay in the mobile phone industry, buy rights to the Blackberry name and focus on the Enterprise and professional markets with solid phones built around security rather than entertainment.
Something like that would free up all kinds of funds for R&D projects into potential technologies, while playing to their strengths. Microsoft is not -- and never will be -- the entertainment company it seems to desire. Yes, there's potential money in it, but it simply doesn't align with their core business.
Re:Symbian, really? (Score:5, Insightful)
As an OS, Symbian sucked. As an interface to a phone, it worked well. People who wanted a phone to run games and run all the bells and whistles didn't buy Nokia phones. People who bought Nokia phones wanted a phone that made phone calls, and in a pinch could do some other neat tricks, too.
For comparison, consider my wife's old Android phone, which crashed when the Phone app was opened... or my iPhone, which has trouble figuring out whether it wants to use Wi-Fi or 4G for data transfer at any given time. My old Nokia phone was just a phone, and for a large market segment (such as the elderly retirees whose kids insist they have a cell phone "for emergencies"), that's all they need.
Nokia had a niche market all ready as the manufacturer of reliable low-end phones. Elop led them down the familiar Microsoft path of following the latest trends, so they lost that one market they dominated.
Keep XBox, dump Bing? (Score:5, Insightful)
The XBox unit is profitable. The entire first generation of the XBox was financial lose, but in the last few years, the business finally started to make money.
Bing, not so much. Bing seems to be a dumping ground for Microsoft managers. Every year or so, there's a new management team at Bing. Their business strategy is "copy Google". To some extent, they have to - for a while, their ad system was completely different from Google's, and advertisers wouldn't bother to use it. Something like 80% of Bing users use Internet Explorer. Those are the people who don't know how to change the default search engine.
Google as the only major search engine, though, is scary. The remaining competition in web search is tiny in the US - IAC, InfoSeek, Yandex, and Baidu. (DuckDuckGo and Bleeko are resellers of Bing and Yandex, respectively.) With no competition, Google could charge much more for ads and become even more intrusive.
Himself (Score:2, Insightful)
He was and always will work for himself - most CEOs are pathological sociopaths, and have interest in no-ones benefit but their own.
Re:Let's not mince words (Score:5, Insightful)
office is profitable but for how long? (Score:5, Insightful)
Putting all your eggs in the Office camp seems very dangerous. Our office recently
migrated to openoffice and never looked back. I use google docs at home. Both
are currently weak and can only get better. Google has recently added office tools
to android. I see standalone high dollar office suites as a dying breed. I personally
would not double down on them. Same with high-end computer OSes, another one
of Microsoft's cash cows. If microsoft wants to exist in 20 years they need to be in
the tablet, smartphone, tv console, and other growing markets that continue to reduce
the need for a full blown desktop at home. I know a lot of people who no longer have
a desktop computer or see no need for one. This number will probably continue to
grow as tablets/smartphones and roku/xbox type devices continue to add features.
With Elop's record (Score:5, Insightful)
Re:Dumbphone service at 80 percent off (Score:3, Insightful)
I have no interest in a phone I have to recharge every day or two which reports everything I do back to Google. So even if they had a 'bargain basement' plan for Android phones, I wouldn't be buying one.
Re:Alright, in all seriousness (Score:4, Insightful)
Except the only real reason to buy Office is if you need 100% compatibility with the latest version of Office producing the latest version of Office files. For the rest of us, free software is good enough.
Re:All in favor of Elop getting the job? (Score:5, Insightful)
First, your sed input string syntax is bogus.
Thank God I wasn't referencing sed then, huh? ;)
(notice that I wasn't replacing anything, but pointing out differing competitors).
But more importantly, this has been Microsoft's business strategy since not long after it encorporated: "Extend, Embrace, Extinguish." It isn't killing them in the long term, and analysts only ever look at the short term. I shouldn't have to explain the problem of short term thinking.
The problem isn't that Microsoft is moving to a new market, but that they keep jumping out into a plethora of different markets with little rhyme or reason - oftentimes it appears that they're just doing it in case something takes off. Call it shotgun-strategy.
Look at it this way: Buying into the games console market, shovelling zillions of bucks into it, and almost 12 years later not seeing anything close to an ROI? I can understand the charge of "short-term thinking" if the time frame were less than two years, but a decade + is a friggin' eternity in the tech world.
Meanwhile, we have Microsoft casting expensive nets into the worlds of mobile (both tablets and phones), games, television, music, enterprise servers, cloud services, web search, and a whole pile of other directions that make no damned sense. Their overall strategy is moving in as many directions as they can perceive - often to the detriment of their core businesses (see also Metro/Modern, the gawdawful ribbon interface, etc.)
Long story short, there is a big difference in moving into new markets to strengthen (or even transform) your core businesses, and simply throwing everything you can at the wall to find out what sticks - even when it makes no fiscal or branding sense.
Microsoft hater but come on! (Score:3, Insightful)
I've had a dislike for the company since the 90's. But I'm thankful to them for the job security I enjoyed supporting and maintaining their products in enterprises. But I come home at night to Mac and Linux systems.
But seriously, Long term, Office and Windows are doomed. There is some interesting tech in Xbox Connect that could create some game changing product categories in enterprises such as Medical Tech etc. Bing, is the only thing that I can see that could even approach giving Google a ride but it's way too far behind. These 2 divisions should be spun off or at least unleashed (e.g. MSFT retains an ownership stake but takes them public) and run on a profitable basis (if they can). The bureaucracy at MSFT is killing innovation.
The other interesting things MSFT is doing are their Azure platform and universal identity management. But a mistrustful tech community will hamper adoption of these products.
Re:Back to Basics (Score:5, Insightful)
Microsoft has a different problem: their older products are their own stiffest competition. Why will anyone buy Office 2016 when Office 2013 already does everything the typical consumer needs?
It used to be easy to sell new versions, because the old versions were buggy, bloated, hard to use, and missing a lot of useful features. But Microsoft has dramatically improved their quality. They've added piles of features. They've improved usability for the average John and Jane Does of the world. They've built a system that does everything the typical user needs. So their old free-ride path of "upgrade our old crap because you need to" is over, because it's no longer needed.
What they've since recognized is that their customers suck at owning computers. Most people don't make backups, they get viruses, they don't know how to manage a home system. So they are offering Office365 in the cloud to appeal to people to not have to care any more (for only $9.95/month). All John Doe has to do is remember his password, and everything else is taken care of for him. They can continue to offer token features and upgrades thrown into the price, but the real money of tomorrow will be made hosting people's data for them, not in the software. It's not the back-to-the-basics approach you advocate, but it's what they're betting will be their future.
Re:All in favor of Elop getting the job? (Score:4, Insightful)
It's clear this is all nonsense. Xbox is only really valuable to Microsoft. And it is valuable to Microsoft. You can tell this was written by someone without a clue by this quote:
That caused Nokia's share of the overall mobile-device market to dive into the single digits.
Abandoning symbian did not destroy Nokia. Just ask Blackberry what it's like to compete with iOS and Android. Blackberry even went so far as to make their phones essentially an Android phone but with extra features and they still bombed. The Symbian implosion would have been as brutal and swift as the black berry implosion. The only thing keeping Windows Phone a viable third candidate is a giant pile of cash and determination on Microsoft's part. It'll probably pay off but Nokia had nowhere near the funds to survive a fight like that.
Everything I've heard from my friends in the phone space is that hardware manufacturers are all feeling under siege. Samsung has managed to grab some market share but they don't expect them to hold on very long with the waves of Chinese clones and companies like MediaTek who are getting very very fast at implementing the latest ARM, Broadcom and Imagination IP significantly faster than Samsung etc.
Nokia picked the right approach. They completely cornered the Windows Phone market. Look at Motorola. They are owned by Google and they can't break into the Android market with great hardware and software. Why? Because of people who tell me they have a "Galaxy" phone. I heard the BBC say the number two phone platforms were Apple and Galaxy--with Windows Phone in third place. They didn't even call it Android. Lumia might be doing only so-so in the US but they're doing very well overseas. Largely because the US is a subsidized phone market. But even that is changing.
Nokia controls almost the entire Windows Phone market. When Microsoft's giant dump trucks of cash start translating into market share the Lumia line was well positioned to take the vast majority of the sales.
People who think Nokia died because they went Windows Phone are ignoring the plight of Motorola, LG, Sony and HTC all of whom embraced android and are doing poorly in the US.