Does its Nokia buy thwart or fuel a possible Microsoft break-up?
In one fell swoop, on September 3, Microsoft bought Nokia's handset business for $7.2 billion, announced plans to bring its CEO Stephen Elop back inside the company, and added 32,000 more employees to Microsoft's ranks.
I guess those "advanced" talks to buy Nokia, which reportedly broke down in June of this year, resumed some time recently.
Speaking of time, timing, actually, is rather key to the Microsoft Nokia announcement. Just look what's happened in the past few weeks:
July 11: Microsoft announces a sweeping internal reorg, creating four new engineering units, a centralized marketing operation and a structure its management believes is more suited to supporting Microsoft's new devices and services charter.
August 23: Microsoft announces CEO Steve Ballmer will be retiring some time in the next 12 months. Ballmer and the board maintain that Microsoft will continue with its recent reorg plan and develop both consumer devices and consumer and business-focused software and services.
August 30: Microsoft clears the way for investment fund ValueAct to join its board. ValueAct officials have hinted they think Microsoft's real value is in software and services, and maybe not so much in devices.
September 3: Microsoft buys Nokia's handset unit; both the Lumia smart-phone and tablet and Asha feature-phone brands; and Nokia's CEO Elop -- who for about two years, ran the Office division at Microsoft. Elop is going to head up an "expanded devices team" at Microsoft. Julie Larson-Green, the recently minted Executive Vice President of Devices & Studios, is going to report to Elop once this holiday season's Xbox One and Surface 2 launches are over.
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What's next? Some think it should be a break-up of Microsoft into at least two separate companies.
This isn't something current Microsoft management has said it favors. Microsoft's execs and its board have maintained that Microsoft should not divest itself of any of its current businesses. The "One Microsoft" idea means a company that is a player in everything from entertainment consoles and phones, to Hadoop and ERP software.
Ballmer and the board have claimed and continue to claim that Microsoft needs to be in both the consumer and enterprise markets because of the bring your own device/consumerization of IT trends. The official stance is growth in enterprise is untenable without a strong consumer/device presence.
Some company watchers -- possibly the ValueAct crew, among others -- haven't bought into this idea. ValueAct officials haven't said explicitly that they think Microsoft should exit the devices and consumer markets, but the implication is definitely there. And there have been repeated calls by Wall Street for Microsoft to either sell off or at least split off some of its businesses like Xbox and Bing.
Adding Nokia to the Microsoft mix could make it a lot more difficult to justify carving up Microsoft along devices and services/software -- or consumer/enterprise -- lines. Are smartphones consumer or enterprise? What about Lumia phablets or tablets?
But in another way, maybe the Nokia buy makes it easier to envision cleaving Microsoft along devices and services lines. Maybe Elop -- who seemingly is now a confirmed internal candidate for the Microsoft CEO job -- ends up as CEO of Microsoft Devices. (And Executive Vice President Satya Nadella or Executive Vice President Terry Myerson ends up as CEO of Microsoft Services?)
What do you think, fellow and sister armchair quarterbacks? What's the next move for the 'Soft?
Global coverage: Nokia Interim CEO: Microsoft deal makes us stronger | Even with Nokia devices, Microsoft wants to license Windows Phone to other makers | Does its Nokia buy thwart or fuel a possible Microsoft break-up? | Microsoft shows how to flush decades of Nokia goodwill away | Microsoft gets less than $10 per Windows Phone unit | Microsoft-Nokia deal: Reaction from the Twitter trenches | Elop drops Nokia CEO role to lead devices team under Microsoft deal | Microsoft-Nokia deal: 11 quick facts | Microsoft to buy Nokia's devices, services unit for $7.2B