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Steve Ballmer
Former CEO Steve Ballmer threw a fit until he got his acquisition

Microsoft and Nokia have had a close relationship over the years, where Microsoft provided the Windows Phone software and Nokia made the hardware. But when former Microsoft CEO Steve Ballmer wanted his company to become a hardware maker, many top executives disagreed with such a move -- including current CEO Satya Nadella
 
According to Bloomberg, Ballmer was set on getting his way when it came to the acquisition of Nokia's Devices and Services division last year, despite opposition from top-ranking execs in the company. Ballmer reportedly threw a fit that everyone could hear last year when he learned of their opposition. 
 
Microsoft co-founder and current Technology Advisor Bill Gates along with Nadella and former Skype CEO in charge of Microsoft's business development Tony Bates all initially opposed Microsoft's move into hardware, as well as the idea of an expensive Nokia acquisition.
 
The board didn't back Ballmer's plan to acquire two Nokia units at the time, but after Ballmer's hissy fit in June 2013, the board signed off on a $7.2 billion USD purchase of Nokia’s mobile phone business. Nadella had also reportedly changed his mind about the Nokia acquisition, saying it was a good idea after all.
 
“Nokia brings mobile-first depth across hardware, software, design, global supply chain expertise and deep understanding and connections across the mobile market,” said Nadella. “This is the right move for Microsoft.”

Bates, on the other hand, remained strongly opposed. Earlier this week, it was announced that he is leaving the company immediately, which could be a result of being passed up for CEO earlier this year. There could also be internal frustrations with his opposition of Microsoft's move toward hardware. 
 
But Microsoft team members had a right to worry about the company's future in hardware, as the past has been quite telling. For instance, Microsoft's first homemade tablet called Surface was largely a flop at launch in October 2012. Windows RT was seen as a half-baked Windows product that didn't run legacy apps, and the Windows 8 Pro version was much too expensive for the typical consumer, and Windows 8 in general created a storm among users who just wanted their Start button back and the live tiles on their desktops to go away. 
 
In July 2013, Microsoft reported the largest earnings miss in at least a decade and took an unexpected $900 million charge due to the Surface flop. 
 
Ballmer announced that he would be retiring as Microsoft's CEO within a year last August, and Nadella was named CEO in January. 
 
Nadella is currently shaking up the executive ranks and unraveling certain parts of Ballmer's restructuring process.

Source: Bloomberg



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By DanNeely on 3/5/2014 2:55:03 PM , Rating: 3
...with Nokia selling the vast majority of WP8 handsets they had a huge amount of shakedown potential to force MS's hand. They could point to the work they were doing with Android internally and threaten to switch platforms entirely. This would effectively kill WP8; meaning that unless MS was willing to abandon mobile entirely Nokia had them at their mercy.




By amanojaku on 3/5/2014 3:58:04 PM , Rating: 1
I think the move was a necessity. Without a mobile platform, MS will definitely sink. The most popular computing platforms are mobile, and they come from two companies: Apple and Google. Hardware vendors can't get access to iOS, so the only options are Android and Windows Phone/RT. Unfortunately, Windows Phone/RT devices have seen little traction and hardware vendors are quietly phasing them out. Just compare the number of Android offerings to Windows Phone/RT offerings.

MS messed up mobile in many ways, but the worst is that it took too long to address the threats from Apple and Google. With iOS becoming the de facto mobile winner on the high end, MS would have had to release something truly stunning to compete. Even Google is struggling with that, although HTC, LG and Samsung have released offerings that are decent rivals. The problem is that the public just doesn't believe anything outside of Apple could be high quality.

This leaves MS with the low end. The problem there is that Android already owns this market, as well. Android is free, so companies just have to spend on hardware R&D. MS charges an outrageous amount of money for Windows Phone/RT in comparison.

The result is clear: no hardware vendor is going to risk money on a large number of high-end devices (only Samsung makes significant sales here), and Windows is just too expensive to license for low-end hardware. MS has to do mobile on its own, and be willing to lose money for 3-5 years until it can turn around the public's perception. By then, most Android and iOS devices will be up for a refresh, and Windows may have a chance in the mobile space. MS isn't like BlackBerry - it has a large product portfolio, so it can use its successful units to offset the ones that are struggling until they turn around.

The biggest issues at MS are the internal conflicts between the senior leadership team, and the SLT and the investment board. Hopefully, the restructuring solves this. Read the source article; it has some interesting information, including the reason Alan Mulally was passed over.


By retrospooty on 3/5/2014 4:15:30 PM , Rating: 5
" They get hacked every day, they crash, they lock you in to the Redmond ecosystem"

Your myopic analysis is wrong as usual.

"People don't want that. Plain and simple."

MS's 90%+ Desktop market share says otherwise.


By inighthawki on 3/5/2014 4:28:06 PM , Rating: 2
God you just never stop do you? Could you for once make a post that isn't just a bunch of random comments about how much you hate Microsoft? We get it already. You think their software is garbage.

Everyone else: Please stop encouraging him.


By amanojaku on 3/5/2014 5:26:05 PM , Rating: 4
You are so right. Read Argon's response to another of my posts:
quote:
By Argon18 on 3/5/2014 4:58:05 PM , Rating: 2

"Since Linux predominantly ran on servers, the kernel was adjusted to support PAE." [amanojaku]

What a bizarre statement to make. The same Linux kernel that runs an email server is also running your Android phone, and also running the most powerful supercomputers on earth. It's the same kernel, same code.

If someone came out with a super smartphone right now today that had 64 CPU cores a 1 Terabyte of RAM and a 4k display, Linux and Android would work on it perfectly. Right now today. No modifications required. Nobody else can make that claim. Certainly not Microsoft with their dinky Windoze Mobile and RT tinker toys.
I'm gonna ignore how he sidestepped my proof that 32-bit Linux suffered from the 3GiB memory barrier before PAE was enabled.... No, no, I can't.

http://en.wikipedia.org/wiki/MMIO
http://en.wikipedia.org/wiki/PCI_hole
http://techfiles.de/dmelanchthon/files/memory_hole...

And...

The same Linux kernel code runs unmodified on supercomputers, email servers, and smartphones?

Linux can run on a smartphone without modification ??

Android can run on any device that has 64 cores, 1TiB of RAM, and a 4K display without modification ???


By themaster08 on 3/5/2014 4:41:06 PM , Rating: 4
quote:
Funny, if you ask all the consumers who aren't buying their crappy me-too tablet and phone products, I don't think this would even be on their list.
Yet, sales of Windows 8 alone surpass that of all linux desktop distros combined.

quote:
They get hacked every day, they crash
I guess that's why Android accounts for 97% of all mobile OS malware. Because Linux is more secure.

http://thenextweb.com/google/2014/03/04/f-secure-a...

quote:
they lock you in to the Redmond ecosystem
As do ecosystems and services based on Linux and UNIX - Android, iOS, Ubuntu...

At least with Microsoft's ecosystem, their services are available on all major platforms which allows for flexibility.


By sprockkets on 3/5/2014 5:00:24 PM , Rating: 2
So what about Linux? If we count android as Linux, win8 is currently having its ass handed to it.

quote:
I guess that's why Android accounts for 97% of all mobile OS malware. Because Linux is more secure.


Bullshit. Malware is made for android because it allows people to install what they want. To claim it is insecure because of that is ridiculous. Android doesn't allow apps to snoop on each others data, and the base os is untouchable and read only, even more so now with SELINUX.

quote:
As do ecosystems and services based on Linux and UNIX - Android, iOS, Ubuntu...

At least with Microsoft's ecosystem, their services are available on all major platforms which allows for flexibility.


More bullshit. MS has historically made most of their software for windows only like directx, exchange, active sever, and many others, and some for osx, while every Linux program out there works on windows as well, like handbrake, GIMP, libreoffice, and others. Hell, even KDE wants to make their desktop run on windows.


By themaster08 on 3/5/2014 5:06:47 PM , Rating: 2
Calm down, pal. My intention was only to counteract Argon's irrational hatred towards Microsoft.

quote:
So what about Linux? If we count android as Linux, win8 is currently having its ass handed to it.
I said desktop operating systems. Read again.

quote:
Bullshit. Malware is made for android because it allows people to install what they want. To claim it is insecure because of that is ridiculous. Android doesn't allow apps to snoop on each others data, and the base os is untouchable and read only, even more so now with SELINUX.
Replace Android with Windows and it's exactly the same.

quote:
More bullshit. MS has historically made most of their software for windows only like directx, exchange, active sever, and many others, and some for osx, while every Linux program out there works on windows as well, like handbrake, GIMP, libreoffice, and others. Hell, even KDE wants to make their desktop run on windows.
In the same way that Google provides none of its services in AOSP, or doesn't provide Google Play services for competing platforms, or how Apple doesn't provide iCloud, iMessage, and its other services on competing platforms.


By sprockkets on 3/5/2014 6:14:22 PM , Rating: 2
Fair enough then. But that stuff you mentioned isn't anything oss.


By Mint on 3/5/2014 9:16:45 PM , Rating: 2
Waiting too long to address a changing marketplace is a common mistake of big companies (Google, by contrast, did well to respond to the iPhone ASAP).

It's the root cause of Nokia's downfall. They were between a rock and a hardplace when Elop took over, as they should have switched to Android a year earlier. At that point, the choice was starting from zero with Android or taking a risk (and a $250M/quarter bribe) from MS.

And, as you mention, it's why MS is so far behind in mobile. They came up with a good OS, but you can't twiddle your thumbs for that long without consequences.

I also agree that entering hardware was necessary for MS's long term presence in mobile.


By CaedenV on 3/6/2014 7:50:04 AM , Rating: 2
Completely agree with you here. If nokia moved to Android 1-2 years earlier then they would be Samsung today... but they didn't, so when it came time to move to a new platform then they had the option to become another "Me Too" company attempting to compete with Samsung... or take over a niche market. Making the move when they did, Android would have been suicide. With no other OS contenders, WP was the only right choice available. A few years later then perhaps FirefoxOS or Ubuntu's phone OS would be an option... but they did not exist at the time.

On the other hand, MS has had a rough time with WinMo and WP7/8 because the company wanted to make a good smartphone, while the board just wanted a patent generating machine without the liability of a consumer product. Because of this WP has a lot of great technology built in... but it is often incomplete or short sighted from a consumer viewpoint. Thankfully (and I say thankfully because I am a WP user) MS has done a 180 on this viewpoint over the last 2 years, and they are really developing the OS as a true product now. Where winMO and WP7 had major issues, WP8 is much better. WP8 is still lacking a lot of features, but the WP8.1 leaks show that almost all of those features will be addressed this year.
It is a company playing catchup, but they were catching up. 2013 was all about catching up on hardware support, and they did that successfully. 2014 is all about feature support and building the app store. 2015 will be all about WP9 and completing the merge with winRT in order to potentially add more PC-like features, and fix development and store issues to get app developers to take them seriously. They are constantly on the verge of "too little too late", but so far have kept up good enough to not be blackberry. And at least they have a roadmap in a time when Android and iOS seem to be stagnating. MS may never catch up in the US phone market, but I think that a year from now the landscape will look very different in a worldwide perspective with WP and iOS neck and neck in most markets.


By melgross on 3/6/2014 11:11:51 AM , Rating: 2
I don't agree that this was necessary. The question for Microsoft is what they want to be ten years from now.

If they insist on being a consumer, as well as a business oriented company, then perhaps, this was a good move. But the real question is whether they should continue trying to be a consumer company. The truth is that they haven't been very successful at it.

I know some people will fry me for saying it, but their Entertainment Division has been losing money ever since the XBox first came out. It's lost over $12 billion over the years. Despite their attempts to hide those losses, first by adding the small devices division into it, and the latest, by adding the income from Android licensing, seen by digging into the financial statements, has shown that the division lost $1.25 billion in 2013. There seems to be no way out io this.

They're losing hundreds of millions each, every year, on phones, tablets, Bing, etc.
These are objective facts, seen in their own financial statements.

On the other hand, their Server and Tools are doing very well. Office is still doing well, but sales increases are being dragged down by the poor reception of Win 8, another attempt to rope consumers in.

There is a lot of sentiment out there for Microsoft to drop these, what are being called "distractions", so that their business divisions can concentrate on what they do best, and to stop worrying about how they can integrate with the consumer divisions, which are doing poorly.

I understand why Ballmer wanted to buy the phone division of Nokia. The real question is whether they should just drop phones altogether. Despite sales increases over the year, there was a substantial Nokia phone drop in sales during the last holiday quarter, which is a time when phones sales increase. Overall, Win Phone lost marketshare during 2013, after gaining some earlier in the year.

RT seems to be done, and Pro tablets aren't selling very well. Of all the embarrassment, a friend of mine, an executive with IBM, bought a surface Pro last year. Three months ago, IBM gave him an iPad Air. What does that say?

Perhaps Microsoft is barking up the wrong tree.


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