In one of his last great acts, 'Crazy' Steve Ballmer, the Microsoft CEO has agreed to buy Nokia, for about 4.6 billion stg/7 billion us dollars.
Nokia, the one time Finnish world leader in mobile phones, has worked with Microsoft since 2011 on the Lumia phone. More importantly perhaps, former Microsoft executive, Stephen Elop and current Nokia CEO, was tipped to replace Ballmer.
So is this case of getting a new Microsoft CEO with the company? Buy one, get one free?
It's yet another Microsoft deal that seems on the surface, "bizarre". They all do at first and then when you reflect....well, they all still do.
Firstly Microsoft already has working relationships with other hardware manufacturers, notably Samsung, who'll see this as competitive. A huge conflict of interest anyway.
Secondly a price tag of nearly 7 billion usd seems high for a company that had its stock recently at 'junk status' and frankly, that has little brand status remaining in the smartphone market. All to be paid in cash.
Thirdly, 32,000 employees come with it. That's a big, huge ongoing cost and basically increases the Microsoft workforce by a third.
As one blogger put it, "This would be the deal of the year....if it was 1997" Another suggesting they should buy AOL and Betamax next. In other words, it's all a bit late and a surprising concept for Microsoft to tackle Apple/Samsung mobile dominance, now. That game, one would have thought, is well and truly over.
And you know what? Microsoft just do things and leave them there. Perhaps like the Skype acquisition, there just isn't, a plan.
Here's Ballmer note to staff about the Nokia buy;
To: MS FTEs
Date: Sep. 2, 8:00 PM PDT (Sep. 3, 6:00 AM EET)
Subject: Accelerating Growth
1. Stephen Elop will be coming back to Microsoft, and he will lead an expanded Devices team, which includes all of our current Devices and Studios work and most of the teams coming over from Nokia, reporting to me. 2. Julie Larson-Green will continue to run the Devices and Studios team, and will be focused on the big launches this fall including Xbox One and our Surface enhancements. Julie will be joining Stephen’s team once the acquisition closes, and will work with him to shape the new organization. 3. As part of the acquisition, a number of key engineering leaders will be joining Microsoft from Nokia, reporting to Stephen in his new capacity: · Jo Harlow, who will continue to lead the Smart Devices team · Timo Toikkanen, who will continue to lead the Mobile Phones team · Stefan Pannenbecker, who will lead Design · Juha Putkiranta, who will lead the integration effort on Nokia’s behalf 4. Regarding the sales team, we plan to keep the Nokia field team, led by Chris Weber, intact and as the nexus of the devices sales effort, so that we can continue to build sales momentum. After the deal closes, Chris and his team will be placed under Kevin Turner. We will develop a single integrated team that is selling to operators, and there may be other integration opportunities that we can pursue. Kevin will work with Chris Weber and Chris Capossela to make those plans. 5. Our operating system team under Terry Myerson will continue unchanged, with a mission of supporting both first-party and third-party hardware innovation. We are committed to working with partners, helping them build great products and great businesses on our platform, and we believe this deal will increase our partner value proposition over time. The established rhythms and ways of working between Terry and his team and the incoming Nokia team will serve us well to ensure that we do not disrupt our building momentum. 6. We are planning to integrate all global marketing under Tami Reller and Mark Penn. It is very important that we pursue a unified brand and advertising strategy as soon as possible. 7. Finance, Legal, HR, Communications, DX / Evangelism, Customer Care and Business Development will integrate functionally at Microsoft. Sourcing, customer logistics and supply chain will be part of Stephen’s Devices organization. ICM / IT will also integrate functionally for traditional IT roles. We will need to work through the implications for factory systems given the differing manufacturing processes and systems at both Nokia and Microsoft. 8. We plan to pursue a single set of supporting services for our devices, and we will figure out how to combine the great Nokia efforts into our Microsoft services as we go through the integration process. 9. There are no significant plans to shift where work is done in the world as we integrate, so we expect the Nokia teams to stay largely in place, geographically. 10. Tom Gibbons will lead the integration work for Microsoft.