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August 24, 2013

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ex-navteq

Don't be surprised if Elop becomes the new CEO of Microsoft... Incompetence is often rewarded especially when the new person in charge can follow orders from the shadows.

Tomi T Ahonen

Hi ex-navteq

I would love for Elop to go from Nokia to Microsoft, obviously, and that his departure would be obviously within the next 12 months.

I think the track record of very bad judgement by Elop, and even worse, very bad execution by Elop, suggest he is spectacularly poor choice as CEO. At Nokia, Elop's predecessor, Olli-Pekka Kallasvuo was not a good CEO. He wasn't horrible, he just wasn't good enough, for tough times, and was fired. But Elop came in, and made things far worse.

If Ballmer was replaced by Elop, for Microsoft it would be the same thing as happened now at Nokia - a company in trouble, a bad CEO exits. A worse CEO comes in, and makes things far worse for the company.

And here is why I am very confident this won't happen. If Ballmer was in charge and selected his own predecessor, yes, he seems to like Elop a lot, and could appoint Elop to succeed him. Ballmer did not leave on his own terms, he was clearly pushed, by Gates with that very public statement critical of his management, and no doubt a far more internal push - resign or I will fire you.

So it will clearly be Gates in charge, selecting Ballmer's successor. Gates is a far brighter person than Ballmer (or Elop) and can very quickly do the math and the analysis. Gates can see that from Nokia's point-of-view, where Elop was the CEO - Elop has been detrimental and showed exceptionally poor judgement in his strategic choices. In his execution, he has been literally the worst CEO of all time. Gates will not do a superficial overview of some selected items, he will do a serious background check - after all Gates's first choice to succeed himself - Ballmer - is now proven to have been a failure. Gates doesn't like to fail. He will be thorough in selecting the next CEO.

And the truth of Elop's mistakes will be blatantly obvious. Gates can't take that risk hiring Elop to Microsoft. He needs a certain performer who gets results of turning a company around - from bad to good, not from profits to losses haha (Elop is a turn-around master, he is a master at turning success into failure)

I'll write a longer blog about this shortly

Tomi Ahonen :-)

Interested to know

Balmer has missed the boat time and again (usually with a sh*t-eating grin on his face).

He should have milked Windows NT OS on the desktop and server for every penny he could while building nextgen OSes for mobile, cloud and desktop/laptop. Instead Balmer took the lessons he learned as a monopolist in the 90's and kept trying to apply them to every situation that came up.

His idiotic decisions regarding Vista and Windows 8 have permanently wounded the PC market. If Google ever gets serious about Chrome OS, they might create the perfect conditions to kill the enterprise PC market as we know it today. PCs will still exist for a long time, but they won't need all that software installed locally on spinning disks.

Interested to know

PS- I'm truly surprised this happened so soon. I mistakenly thought Balmer was in a strong enough position to hang on for two more years.

Maybe the disastrous Xbone announcements were the final straw for the powers-that-be. Perhaps they realized Balmer was destroying _everything_.

I read a few fascinating blog entries from a former MS employee who contemplated what Balmer's "One Microsoft" adventure would mean for the company. Like everything Balmer has done, it sounded like a slow-moving train wreck. Surely that plan will be scrapped in everything but name soon.

Paul Ionescu

I guess that Microsoft will have Elop fired! Elop is a failure even for Microsoft and not only for Nokia!

ex-navteq

Hi Tomi,

I would love to be wrong ;-)

I remember the chilling sensation I experienced when I read the news about NOKIA forming a strategic alliance with Microsoft back during OPK's reign - it was clear to me that it could end up only in an assimilation of NOKIA. Then the news about Paul Allen's visit of NOKIA, the new ex-Microsoft CEO and his weird departure from Microsoft - as an insider I immediately foresaw the move towards the very unpopular, limited (and IMO unaesthetical) Windows Phone, collapse of sales, dumping of Symbian (Microsoft really hated Symbian consortium for what it did to Windows Mobile though getting rid of Symbian was long overdue). The real tragedy for me was the expected destruction of MeeGo and the Qt ecosystem which was the most exciting thing coming out of NOKIA for a long time and N9 so was enthusiastically awaited for an eternity. As Elop announced move towards Windows Phone I immediately assumed the MeeGo would be killed, then later he would get rid of Qt with the argument that it doesn't generate profit (pity as I knew one of the co-founders of Trolltech). He immediately gave for free all essential NOKIA's patents to some Canadian patent troll formed with Microsoft under really horrible terms for NOKIA and low-balled NOKIA during negotiations with Microsoft. I saw the destruction he caused in the leadership of former NAVTEQ, ousting all people in Chicago that knew how to run a profitable business and replacing them with Berlin's gate5 people that never ever managed to run a profitable business and their only exit was to sell to NOKIA. As expected, these people just spent all the money, went on a nepotistic hiring binge, destroyed sales relationships and caused a sudden deep dip into red numbers right in their first year (all that while NAVTEQ dominated 90% of automotive navigation market!). At that time I examined the recent changes of share ownership in NOKIA and came to the conclusion the NOKIA will be spent as a resource to get Microsoft back into the mobile game - the contractual conditions were extremely favorable to Microsoft. From this point of view you can analyze the recent tablet announcement - NOKIA is just an experiment - if something sticks, good, if not, nobody cares anyway, it has been written off already.

One aspect that is missing from most analysis of NOKIA's downfall is that it was the only non-American company dominating the most growing technology industry. I don't think that was received well in the US circles and Elop's rampage was a very welcome way to help Europe to lose this edge.

That said, I believe Elop's strategy was brilliant. It was just completely opposite to the declared public strategy. For that I believe he will be significantly rewarded by Microsoft. If he is considered a big risk for the world record collapse of a company I am not sure. I would say that people that chose him couldn't wish for a more obedient and covert person at the top. He executed absolutely perfectly, it was a sheer demonstration of how to execute a devious plan with slow weakening of opposition, gradual calculated destruction of technological independence of NOKIA, divide et impera and sublime transfer of anything of any worth from the company (you can see this happening in many companies at the end of their life cycle nowadays anyway).

I worked for one of Microsoft's arch enemies before and was courted to join Microsoft in the past so I have a bit of insight into the way a typical Microsoftie in power thinks (hardened by backstabbing politics).

And Tomi, thanks for a great job! Your analysis is in most ways spot on and your predictions excellent!

Fieni

Goodbye Monkey Boy - http://www.youtube.com/watch?v=UvsZR_LxcHw

EmmanuelM

Personally I agree that Gates is a very smart guy and that Elop has not a single chance to become the new MS CEO. I also agree that the plan was for him to come back as MS CEO when Ballmer would have retire...

The question I have now in mind is : "What would be the consequences for Nokia ?"

For sure I see doubts and uncertainity and then difficulties to sell Nokia Lumia phones...

This is sad at some point just when Nokia was hoping to increase its market share from 3% to may be 3.5 or 4% (Ha ha ) now they will stuck to 3% or may be go down to 2.5 or 2 % ...

The real question is what is going to happen to Elop ? My bet would be that he will not survive very long... I think it could be as early as September ? or may be we have to wait for January ?

The retirement of Ballmer was probably announced by the failure the Nokia acquisition by MS in last July, but at the time nobody saw it coming so fast ...

EmmanuelM

Another comment is that this event clearly highlight the stupidity of the Elopian 'full WP' approach (all my eggs in the same basket, no plan B).

Now more then ever Nokia need to end this crazy strategy and offer some OS alternatives

logic001

Thank You Tomi and all the posters here. Im a big fan of this blog and agree 100% with all the comments.
Big question though - we all know the mistakes that Elop has made. We all know that Windows Phone OS is failing to gain major traction. Im a massive fan of Nokia. Mainly due to it being a great European tech company and once leader. Product (substance) has always been first over marketing (style). Though it had both.

We all know that Nokia needs to adopt another Smartphone OS.

Big question is which one? Android? try to license QNX? Sailfish? Recommence meego? firefox? Return to Symbian? Consider Tizen? Develop a new one from scratch? There are very few options. To some degree and for the moment I would prefer Nokia to remain with Microsoft though also work with Sailfish OS. Or perhaps form a joint partnership and jointly take over QNX with Blackberry.

Is it really a battle of ecosystems at this stage? Therefore are we limited to Android, Windows Phone and maybe QNX?

The only fault I find with this blog is that its very much retrospective. Lets look to the future. What strategy should Nokia take to regain its former self? I guess like me, many of the guys here are Nokia shareholders also.
What can Nokia's shareholders do to wrestle back control of Nokia from its BOD / Elop & Microsoft?

Is it too late to save Nokia? There is so much energy and experience on this blog. Lets look to the future.

Tomi I really would love a response.. or better still a full blog write up :)
logic001

ex-navteq

logic001,

NOKIA is now just a shell of its former self. Most of its brilliant people are long gone at Google, Samsung and another companies. Vast majority of products are now manufactured in China, the inside of phones are mostly generic Qualcomm designs with some added NOKIA features, especially in the camera department.

In post-Elopian NOKIA, if Microsoft owners ever allow it, the only way I see to regain glory is to have some former brilliant people buying and merging what's left and renaming themselves to NOKIA. Similarly to what happened between NeXT and Apple or SBC and AT&T. I however doubt this as NOKIA is bound at least until 2015 to the contract with Microsoft and most assets are already controlled by ex-Microsoft people. Also, the owners of Microsoft own NOKIA as well; they won't do any experiments that would endanger their larger investments in Microsoft. Market value of Microsoft dwarfs the one of NOKIA - it's clear which company goes under the bus if something goes south.

The question is if NOKIA can with its still mediocre phones (sorry, tech specs are not high end except for 41MPix) cannibalize Blackberry sales and increase its market share to sustainable levels. So far it doesn't seem to be the case - I would expect in a few quarters a slow sale of significant parts of company such as HERE to gain operating cash and continuous slow transformation of technology operations into legal operations.

I would personally love Sailfish to be successful however I think the first version of the OS is a step back from MeeGo when it comes to the aesthetics, simplicity and ease of use, clarity of the UI and the first phone's design is not as beautiful/unique as N9 was, hence I don't think it would be able to compete with the looks only on price and with some niche geek fan base. Tizen as the real MeeGo successor is in the hands of Samsung and Samsung so far never produced excellent software (and dropping Qt support is an indication to me that they lost it already). More chance for success I see with the Firefox OS if JavaScript/HTML5 performance gets acceptable for complex games and media, or with Ubuntu OS that has a huge advantage of native apps in Qt and potential for coherent desktop and mobile functionality - both of them can compete on price with Android. It's really shame that there is nothing like MeeGo anymore, especially now when mobile and desktop computing slowly converges - having the same Linux running everywhere would have been great :-(

We will see how Apple users welcome iOS 7 with its "flatness" - if Apple stops being perceived as luxurious item and rather overly expensive toy because of the new "teenage" look, all scenarios will be suddenly possible (however I find it unlikely).

Tomi T Ahonen

Hi logic001

Be careful what you ask for, you might get it :-)

I really feel bad, that I don't anymore have the ability to answer every blog comment. I think we passed that point somewhere around year 2010 or so, might be 2009, about the time we passed our first millionth visit to this blog and the daily volume had grown so big, I just couldn't keep up.

But I read every comment and try to incorporate thoughts and responses in the next blog on that topic, and occasionally come here to respond to an individual topic in the comments etc.

So, with that, about your wish. What now of Nokia? I think the 'big story' in tech is what happens to Microsoft and its various businesses. Nokia's impact only comes out of one rather minor focus area for Microsoft, Windows Phone. While it is an interesting story, I don't think the correct sequence is to start with Lumia impacts haha (And obviously you didn't suggest that either). That is why todays' blog is about what does Ballmer departure mean to Microsoft, with a mobile focus.

But I've already promised - before reading your comment here now - that I'd post the part 2 to that story, the Nokia Lumia side to it. Now what. I'll try to address your issues then. Separately I'll also blog about could Elop become Microsoft CEO and why not. Thats part 3 in the post-Ballmer blog trilogy

Tomi Ahonen :-)

EmmanuelM

@Logic001

The answer to the OS question is simple ...

Is there a dominant OS on the smartphone market ? Yes it is Android

And what is its market share ? It is 80 %

So basically if you want to be a serious player in the smartphone market, no question you need to offer some Android variant of your products...

That said you should evoid to put all your eggs in the same basket, and working with an Open Source, innovative solution is probably a good idea... In Nokia case it makes sence to work with Jolla that is based in finland

MikaA

Congrats Tomi, you seem to have nailed the general trend pretty well since I started to follow this blog!

Ballmer's resignation doesn't surprise me, Microsoft's own performance of recent years has been quite abysmal on what it comes to corporate customers. Given the opportunity of Windows 8 re-arranging the user interface, it more than enables the possibility of corporations switching to something else. As in: "if there is such a radical change in the UI, why not change the software completely?" Add on top of that the NSA spying revelations (well not actually revelation, but more like a confirmation), timing couldn't get much worse for Microsoft.

I actually have hope on the future of Nokia now, it is likely that Elop is fired immediately if Windows Phone is terminated, which could also allow Nokia to exit its contract with Microsoft. Jolla will suddenly be very interesting to Nokia if Windows Phone is terminated.

I don't agree with Elop doing this much damage intentionally, as at the current state, if Microsoft wants to remain in mobile world, they are tied with Nokia, and cannot let Nokia sink and must pay to keep the company afloat. Additionally, the merger of the market shares never happened. It could be even said that if all this was intentional, then Elop did his job in destroying Nokia TOO well. This alone should be enough to stop him from getting the CEO position of Microsoft.

If Microsoft re-thinks its mobile strategy and withdraws, all options are open for Nokia. I don't actually believe in the acquisition of Nokia by Microsoft, they'd have done it now if they really wanted it. I'd say that the legal path Microsoft would need to go through to get Nokia's IP portfolio would become much harder if they stopped the development of Windows Phone within the contract time frame.

markoloco

@leebase


news flash for you.
30% of sub $300 notebook in usa is chromebook.
a remarkable archivement.
and q4 2013 the chromebook vendor and price range is expanding.


windows is dinosour.

MikaA

Keeping Windows 7 requires that Microsoft keeps the support up for the OS, something that I doubt they are willing to do as long as they did with Windows XP. Additionally, I think a lot of European government organizations are seriously thinking about their stance with respect to US software and NSA surveillance, a fall-out of this is only going to be visible in a couple of years.

What it comes to applications, if there is a perceptible shift or demand to alternate operating systems, applications will follow there. Look how even Microsoft had to offer Office package to Android. I'm seeing more and more OpenOffice documents from our customers, and I'm myself pressuring a certain software company to develop a Linux version of a certain heavy duty software.

Corporate world actually hasn't yet gotten over how Office UI changed, and I thought Microsoft forcing Metro UI on PCs was a suicidal plan given the very recent UI change (in corporate terms) of Office. Specifically Microsoft offering courses on how to use the new Office reeked of charging the product price twice, and this is something that tends to pick the interest of the bean counting side of a company. Additionally, I haven't seen developers being very happy about the changes in Windows 8, look at Valve starting to offer Linux based Steam.

For me it seems corporate world said no thank you, and the results speak for themselves. Somehow I still doubt whether Windows 8.1 or whatever it is called can salvage this, I believe Microsoft has to announce a strategy change first before they can become believable again.

R

@leebase: Not quite, but almost. The BIOS comes from the factory locked to ChromeOS, and I don't know why any normal person would buy a ChromeBook just to install Windows on it.

However, the "laptops under $300" market is probably not that big. I thought that was a weird statistic to be happy about.

Steve Ballmer is not entirely gone, but he has announced his retirement and, rumors say, has become dejected.

I think Ballmer's greatest failing was his incredible myopia. He truly believed, from the bottom of his heart, that Microsoft was the best company ever. He wouldn't even let his kids use competitors' products, he was so sure that his way was the best. Contrast that with Steve Jobs, who was notable for bringing his Sony VAIO to Apple meetings until Apple could get around to producing sufficiently fashionable notebooks. Ballmer couldn't imagine anything being better than what Microsoft produced, so he never made a concerted effort to make things better.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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