No U-turn for Microsoft: Nokia deal enforces Ballmer strategy on next CEO

No U-turn for Microsoft: Nokia deal enforces Ballmer strategy on next CEO

Summary: The next Microsoft CEO won't be able to make too many changes in corporate strategy.


Microsoft's acquisition of Nokia's business groups leaves little room for the next CEO to choose a different strategy from the current "devices and services" focus of outgoing CEO Steve Ballmer.

The deal had been in the works for many months. 

Matthew Campbell and Aaron Kirchfeld reported on Bloomberg: Microsoft Raced to $7.2 Billion Deal With Soul-Searching Nokia - Bloomberg

Discussions began in earnest after a meeting between Ballmer and Risto Siilasmaa, the Finnish company’s chairman, at the Mobile World Congress in Barcelona in February. 

The timing of the deal appears to indicate that CEO Ballmer's announced exit was sudden. Otherwise the board would have waited for the new CEO to have the opportunity to set a new strategy for the company unencumbered by legacy deals.

Some Microsoft watchers have urged the company to ditch its consumer business and focus on its lucrative enterprise markets. That'll be near impossible now.

Please see:

Giving Microsoft Free Advice: The Best So Far…And My 2 Cents 

Topics: Microsoft, The Microsoft-Nokia Deal

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Enterprise focus

    While in Enterprise things run slower, do people believe that the wave of mobile generation devices will never get there?!
    Smartphones and tablets will "invade" all aspects of people lives - industry, businesses, homes, schools, ... It's just normal, it was the same with other form of computer devices, even if sometimes the sequence is the opposite - first enterprises then consumers.

    "Services and devices" seems an appropriate strategy for Microsoft, they are getting there late already. If the big picture was set by Ballmer there is a lot for the new CEO to do, the micro-management is as important as the macro management decisions.
    New CEO will have plenty of space to shine...
    • The haters just want MS to become irrelevant

      The reason so many people want MS to become another IBM, is so that MS can drift off into the background and become irrelevant. That is all.
      P. Douglas
      • MS's W8 strategy is a little similar to why IBM became irrelevant.

        IBM wanted to do things their way when Gates offered a better alternative. A similar but seemingly less disaster is happening with MS, but there isn't anyway to tell yet whether this will happen yet as W8 works for some but MS will still have to deal with the angry W8 hate mob.
        • @spineshank155

          "IBM wanted to do things their way when Gates offered a better alternative."

          More like Apple's strategy is similar to IBM :-/
  • CEO great candidate

    NOKIA a great mark, their devices are "Rolls Royce" of the telephony, WP8 a great SO, everything is good news. I believe that the next CEO of MSFT has important challenges on the design and production of hardware, will be something with this high-priority in the company, I believe that a man coming from hardware like he is Pat Gelsinger (now CEO of VMware) is one serious candidate
    luis river
  • Next mistake:

    will be to allow Ballmer to handpick a successor. It will be further decline if that happens.
    • A decline from what?

      If MS profits have been steadily rising over the years, and it is 7th most profitable company in the U.S., and the 17th most profitable company in the world, where is the decline?
      P. Douglas
  • Don't Think So

    Just as an analogy, not to get political: before the 2008 election, there was a good amount of talk how with the way finances were, and then-President Bush having already initiated a bank bailout, whoever was going to be elected was going to have very little wiggle room for financial decisions, and was going to mostly have to stay the course due to fiscal constraints. It appears someone forgot to tell the man who was actually elected, because President Obama certainly made his own decisions.

    If Microsoft's incoming CEO has billions in the bank, and billions rolling in every quarter, she or he will make whatever decisions they deem necessary for one of the world's biggest companies, and a few billion dollar acquisition won't stop them. Companies of that size can write off bigger purchases and just move on (HP, anyone?), if they choose to.
  • The Main Problem.

    Microsoft's main problem is that only knows how to do one thing at a time.

    For example, desktop and server software. Microsoft says that Smartphones like iPhone has not got market share, and tablets and more. Not really focused on mobile market.

    In the past, when he develop Windows 95, ignores completely Internet, developing his own network "MSN, The Microsoft Network" like American Online (AOL) and Compuserve. Rapidly need to develop a Plus Pack for Windows 95 and Windows 98 to support the Internet. Before this all Microsoft focus is completely on Internet.

    Contrary to what others say about how bad it was Windows CE or Windows Mobile, this platform has more than 42% of market share in USA in 2007 ( I have a smartphone with Windows Mobile 6.5, HTC HD and HTC HD II. Its has all i need for bussiness, included a Pocket Office, and the most important, my Calendar, Task and Notes syncronized with my company Exchange Server. Developing for Windows Mobile was easy with Visual Studio. There are a lot of tools to help development like SQL Server CE and more. The development and announcements of Windows Mobile 7.0 were a great promise that we all expected. Even, screens could see of the development of the new version, codenamed Photon:

    Microsoft great error is to cancel Windows Mobile 7. Same like all Windows CE is compatible with Windows Mobile 6.5, Windows Mobile 7 would be compatible with software for later versions. Windows Mobile was first developed in 2002, while Apple first iPhone was presented in 2007. Apple was a good phone for casual, home and general consumer people, while Windows Mobile was a more opened and customizable system for bussiness and developers. When Microsoft canceled Windows Mobile gave all its mobile market share to Google. It was the best gift that Microsoft has made Google.

    Then, Microsoft develops Windows Phone. A more closed system than iPhone, less configurable, with less features and with less applications and no compatibily with older versions. It very simple. More than Symbian. Only contacts and mail can sync with an Exchange account, but, if your account has an space is imposible to add that account. No calendar, no tasks, no notes in sync. Bad. With Windows Mobile and Android HTC has built is own customizable interface with clocks designs that have been very large copied by others. Windows Phone has no customizable interface and for me is very ugly and very flat. Where are the 3D effects, shadows, transparencies, rounded borders, gradients and more that i see on Windows Mobile? Where are all the features that i have in my Windows Phone? Why can iPhone and Android do more better sync with Exchange that Windows Phone? And the lack of quality is very notable.

    Now, in 2013, i continue to see less features in Windows Phone than in older Windows Mobile, iPhone and Android. For bussines, i need to sync all my Exchange elements: Email, Contacts, Calendar, Tasks, Notes and all my exchange folders and subfolders. I dont need facebook, tweeter or clouds. And the user interface is horrible and terrible compared to Android and iPhone. I hear very much people saying this on mobile shops. And its not customizable. And continues the lack of quality.

    With Windows Phone is imposible for Microsoft introduce on business market.

    And now, all is mobile. And put the Windows Mobile UI on Windows Desktop. You have facebook, tweeter, skype, weather, news, videos, music, etc. all in a touch full screen interface on the desktop, but, what about productivity?

    Microsoft is focused on mobile and on the masses. Masses uses devices for consume content, not for create content. Masses dont uses Exchange and dont use devices for productivity, except for Office.

    Microsoft need rapid development and this affects seriously the quality of their products.

    Buying Nokia not solve this. The only solution is developing good products. Quality products. Full featured products. Microsoft needs to develop the best Desktop OS. And the best Mobile OS. With more features and more quality than competitors. This is the only way that Microsoft has currently to win and to compete with otther. The only way. Buying Nokia to sell the same bad products its more of the same.

    If Microsoft not change this, changing completely their strategy, and developing the best Desktop OS, the best Mobile OS, wth more features and more quality than competitors, will become irrelevant very quickly.
  • Re: The Main Problem

    Let's try to stick with the facts and not opinion. If you don't like Windows Phone 8 devices that is fine as I don't really care what devices people have a preference for, but please stick to the facts.

    As someone who has to support all major devices in the enterprise I can tell you that Windows Phone 8 is Microsofts strongest offering to date in the cell phone space, which really isn't saying much since all other previous attempts were really sloppy, half-baked messes.

    From a customization perspective Windows Phone 8 is in the middle. It is more customizable than an iPhone, but less than an Android.

    Windows Phone 8 is very solid and stable, especially the latest generation of phones being released now.

    As for the user interface, that again is your opinion. I like many others rather like the user interface. I like the UI better than that of the UI I had on my Android device, but again that's my

    Many companies like the one I work for have a fairly substantial Microsoft infrastructure footprint (AD, Exchange, Office, Direct Access, MS Domains, etc.) and I can tell you that for those companies no cell phone integrates easier or more seemlessly than the Windows Phone 8 devices.

    I may not agree with many of Ballmer's decisions, but this move with Nokia is a smart one for Microsoft. No one can argue that the mobile market is huge and anyone not trying to be involved is making a huge mistake, so not making an attempt at the mobile market would be a huge mistake for Microsoft. The biggest mistake MS has made to this point is waiting so long break into the mobile market with a legitmate offering, which is now forcing them to play catch-up. And, since Nokia makes up 99% of their cell phone market it would be foolish of them to take a chance with with losing them. If they lost Nokia they really would have nothing in the cell phone space. And, if MS is smart they will keep the Nokia branding because in many parts of the world outside of the US the name Nokia is synonymous with cell phones in much the same way that the name Walkman was synonymous with all portable cassette players back in the day.

    All in all, for the money I don't see this move hurting MS in any way and it only has the potential to help them.
    • Yes. Its my opinion and....

      Saying that user interface on Windows Phone and Modern UI in Windows 8, Server.... is ugly its my opinion. Yes. Thinking that put a mobile interface on desktop Windows 8 and Server is an error making its less comfortable, usable and frustrating user experience is again my opinion. Comments are to express opinions. But i share this opinions with
      hundreds of clients, customers, IT Professionals and friends saying the same. Yes, hundreds.

      And for me its clear that this is the reason of the very low market share.

      And I respect any other opinions.
  • Really?!

    Look at HP where CEO Mark Hurd acquired Palm for $1.2 billion U.S. The next HP CEO, Léo Apotheker, shut down HP's fledgling WebOS-based tablet and smartphone business. And Meg Whitman, the next HP CEO, open-sourced WebOS and later sold it to LG. Not to mention HP layoffs of many former Palm employees.

    And if Microsoft's $7.2 billion U.S. acquisition of Nokia's mobile phone business seems too large to write off, recall that Microsoft recently wrote off $6.2 billion U.S. relating to its failed aQuantive acquisition.

    Never say never.
    Rabid Howler Monkey