6 Ways to make Microsoft / Nokia a Success Story
Does Microsoft's acquisition of Nokia really mean a serious competitor to Google's Android and Apple in the Mobile game?
Above all else, Microsoft's purchase of Nokia's device and services division is about acquiring talent and to an extent, saving face.
The reasons why Microsoft purchased Nokia include great talent, best-in-class hardware design and manufacturing and it was also a bid to rescue Nokia, its largest OEM from financial ruin.
It will be interesting now to see how Microsoft will use the Nokia deal to expedite its quest to build an ecosystem that will attract consumers, drive loyalty and create profit, globally.
If Microsoft is serious about staging a growth trajectory for the company over the next 10 years, there are 6 steps they will need to take to build and grow its brand and become a serious contender in the mobile space.
- Make big changes in the company's operating structure. This has to go far beyond the "One Microsoft" reorganization of July 2013 that created functional groups for OS, Apps, Cloud, and Devices, but stopped short of creating an equivalent Mobile engineering group.
- Fix the internal civil war dilemma. Microsoft must demonstrate that it has finally figured out how to fix its organizational civil wars that pit product teams against product teams, stifling innovation and causing product delays.
- Invest in consumer analytics/marketing/engagement assets. In an age where consumers continue to drive the notion about the consumerization of IT, the lines between consumers and business users will vanish. Measuring, responding and most importantly, predicting consumer preferences matters most.
- Spend to Accumulate. While Microsoft has some unique assets compared to many of its enterprise focused counterparts (SAP, Oracle, CA etc.) , the company must start to use its $77 Billion war chest to buy a hand at the table in consumer analytics, marketing and engagement.
- Defragment operating systems products. It's more than a little ironic that after years of Microsoft trying to extend its Windows franchise by pushing its desktop interface to phones, it's now doing the opposite, pushing its mobile interfaces to the desktop. The problem of course, is that the Windows Mobile interface itself isn't a consumer-lightening rod, nor is it market tested given its 3.7% share. If you couple that with an already fragmented and incomplete OS development schema consisting of Win8, WinRT, and WP8 (one is too fat, one too thin and one inflexible, Microsoft still has a lot to do on the OS side.
- Fix the Operating Equipment Manufacturers (OEM) partner model. Microsoft has to either fix the current OEM environment /partner model, or it needs to buy a big OEM like HP, Lenova or Dell. 65% of the total Windows division revenue of $19.2B comes from Windows operating systems purchased by OEM's and pre-installed on devices they sell. Operating revenues from OEM's dropped 10%, a decrease of $1.3Bn for FE 2013/2012.
In summary Nokia had to change to survive and Microsoft had the most to loose if it didn't act. I'd submit Microsoft should have made the acquisition 2 years ago and included the Location group in the buy. To prosper in the world of mobility involves continuous evolution and Microsoft now needs to set about becoming a credible leader in the mobility.
Mobility is really just getting started. So encourage the new kid re-entering the mobile ring. Perhaps this tortoise can win the race and shake the existing duopoly of Google and Apple.