Elop 'Burns Boats' in Shifting Symbian to Accenture: He had to do it to focus Nokia staff

Last week, Nokia announced that 7,000 jobs would be cut from the handsets side of Nokia, saving the company about 1 Billion dollars in salary costs. 3,000 of those were the shifting of Symbian and its staff from Nokia to Accenture, where Symbian development is now effectively outsourced. A few notes about the Symbian move. This is something Elop had to do, and do fast.

1. Nokia had seen perilous declines in profitability in its handset unit. This kind of cost-cutting is necessary. Rivals like Motorola and LG are still making losses and SonyEricsson was barely profitable. Nokia's profitability was on a severe downward slope, one of the answers is job cuts. This was to be expected. CEO Stephen Elop was tasked to rescue the company and many expected cuts in the 5,000 - 6,000 range. That he did 7,000 tells the investors that he is acting decisively and boldly and is not afraid to take on entrenched interests such as the unions.

2. The outsourcing of Nokia non-core functions is normal operating procedure at Nokia at various reshuffles. As in the past, when Nokia grew some departments strongly, in response to a rapidly shifting world, Nokia would often find it could not hire the right competences or not manage them well, unless done in-house. But that is expensive. As the various new processes then matured, it was normal for Nokia to shift them to outside companies from companies like Satama to others like Accenture. This shift of Symbian staff was to be expected and is not a surprise.

3. It was actually the right thing for Stephen Elop to do. He had to 'burn the boats'. Like Spanish conquistador Cortez is said to have done (some disagreement if he did), when he landed his army in Mexico to fight the Aztec Empire, he (so many believe) burned his ships with his troops to see, there was no possible retreat. They had to fight or else perish.

This is the toughest year Nokia has faced since it was on brink of bankruptcy back in the days of a multi-industry conglomerate some 3 decades ago (when Nokia made just about anything from toilet paper to television sets, from rubber boots to military computers) What Stephen Elop needs is the clearest single-minded focus of all of his employees, to work on the task at hand, make Nokia's transition to Windows Phone 7 smartphones a success. He cannot afford the backroom bickering that all the disgruntled Symbian staff might be doing at the water cooler.

Now he has outsourced the whole problem to Accenture. If any of the former Nokia Symbian staff grumble there, it is not sapping Nokia morale. And if Accenture staff say nasty things about Symbian (and by infrence Nokia) in public, they can take action. The employees who were shifted to Accenture will know, they narrowly missed being fired outright, and will mostly feel happy that they now have an employer who is at least committed to them and their skills, not looking to get rid of them.

Now Symbian the operating system can do its death in peace and quiet, without much further stain on Stepen Elop's early career, soon becoming just a footnote of tech history. And for however many handsets Nokia still makes on Symbian (very likely will do that promised 150 million but probably not many million beyond that), Nokia can focus on the hardware only, again distancing Elop from Symbian and what came before him.

This was the right thing for Stephen Elop to do. We may agree or disagree on his choice of Microsoft Phone 7 as his new smartphone operating system but once that decision was made, he had to get rid of MeeGo, Qt and of Symbian, all which have no place in the future with Microsoft (Ovi will be obviously refocused to utilize the Microsoft partnership). This was the right thing to do.

Meanwhile on that knowhow. What a rich deep resource pool was shifted to Accenture in the move! Whatever you may think of Nokia smartphones and Symbian of late, it was this smartphones software group which did most of the heavy lifting and inventing, seeing an improbable, unlikely future, and made it happen. Remember, Nokia sold touch screen smartphones long before there was an iPhone. Nokia created the world's first pure gaming smartphone half a decade before the iPhone emerged as the world's favorite pocket gaming device (Nokia did that with its own app store too long before Apple launched its app store) and the world's first consumer-oriented smartphone. Obviously on the enterprise side, long before there was a Blackberry, there was the Communicator, as Nokia invented the smartphone itself, and then early in the previous decade, Nokia was the first phone maker to split its smartphone business into divisions, one focusing on enterprise smartphones and their apps. Nokia was the first phone maker to audaciously claim that what they offered for the pocket was a true computer - something today in the iPhone era, all PC makers agree is true. And while Symbian was indeed an old operating system, it was designed for phones or pocketable devices, it worked very well with smartphone also of modest performance specs, and did have most of those things that were missing from the early iPhones, and also missing from many rival operating systems early on, like multitasking, folder views, Microsoft Office suite compatibility, while being the most compatible system around supporting just about everything including Adobe Flash of course.

Symbian is an old and obsolescent operating system, that is true. But it was kept alive with continuous updates where all of its contemporary operating systems had been killed along the way. Symbian had always been developed with backwards compatibility (an expensive option, but one much better for developers and end-users than deciding to not have it, like Microsoft did last year when they announced that the new smartphone operating system Phone 7 would not be compatible with Microsoft's legacy OS of nearly ten years, Windows Mobile). And Symbian was being developed always to supply multiple handset makers, another factor that added costs (compared to say Apple or RIM or HP/Palm whose operating system only needs to power smartphones for one maker, addressing one specific customer segment). Where many complained that Symbian was out of date, in reality, it was the operating system of choice by Japan's NTT DoCoMo, powering their smartphones/featurephones which by most measures are the most advanced phones on the planet. So there was (and still is) life left in that operating system, inspite of its age.

That Symbian had survived this long and still remained viable - and the latest iteration, Symbian S^3 is quite user-friendly even as a touch-screen OS - is testament to the hard work and dedication of the Symbian development staff, led increasingly by Nokia. That Nokia itself had achieved one massive milestone after another in the true inventions and innovations of smartphones (even if to modest successes in some cases, where Nokia's invention was clearly ahead of its time - this is no crime, look at Apple's Newton, which while failing the market, is still seen as the first modern PDA).

The smartphone environment and the operating systems and app stores we use today are all richer and better because of the pioneering work done by Nokia and its smartphone developers. Much of that staff, in particular on the side of the software and OS skills, has now shifted to Accenture. What Accenture gains in this transfer of knowhow, is an immense depository of the deepest knowhow into the future of digital convergence. If Accenture wants, it can use this as a big stepping stone to building a bigger future for Accenture in the digitally converging space.

I wish all my friends and colleagues at Nokia/Symbian and now Accenture the very best. The options if you had remained at Nokia were not good. But hopefully at Accenture your skills will be recognized and celebrated and you will find a new career and greater success there.

Symbian is dead, long live Symbian..  :-) 

Comments

[Sander van der Wal]

Symbian is a much younger OS than either BSD, which powers iOS, or Linux, which powers Android. Its problem was that it was too hard to program for, so, while it was good on underpowered hardware, by the time hardware got powerful enough for the Unix closes iOS and Android, it lost on programmer friendly-ness immediately.

You are also forgetting that Epoc, as Symbian was called in the nineties of last century already had a touch UI, and that UIQ, as used by SonyEricsson, also was a popular touch UI.

App Stores are also not a Nokia invention, Go32, and Handango are a couple of Pre-Symbian App Stores. Note that both UIQ and S80 Communicator software sold very well on those stores, much better than S60 software.

And Nokia murdered its iconic Communicator brand all by itself with the introduction of the E90, using the T9 S60 UI instead of the UI that is much better for querty keyboard devices: S80.

So while there came a couple of good things out of Symbian at Nokia, there were also a number of preventable or redeemable big mistakes there. But Nokia thought it was so clever it never made mistakes, so there never was something to prevent or redeem.

[mergel]

the other side of things which would deserve a separate blog post...is the kind of strategy that Accenture is pursuing through this "people acquisition"
I doubt there will be no cut in forces. remember the Capgemini-Schneider people + IT outstourcing deal a few years ago, and some others I don't even know
my guess: Nokia could destroy itself with such a massive & brutal stop in the field, in what used to be as you're pinpointing one of the pioneering OS for smartphones, so one of the most innovative team in that space. laying off 7000 highly qualified innovative engineers, technicians & business men would be a real earthquake at nokia & could threat the stability of the "rest" of the company. Other major companies have been experiencing similar disasters & it took them years before recovering a company spirit & culture
but the point it: with such a huge hidden layoff outsourcing approach, are we witnessing a new kind of business at a time where innovation & industrial cycles get shorter, growth & decline faster & more brutal (the smartphone landscape which has drastically moved in a matter of years, and the social companies cycle phenomenon with companies surfing à light speed on what could a sustainable trend...or not)
if I may do this metaphor, you companies that want to disengage from business that have suddenly lost their cutting edge with thousands of people to unboard, ...send them to the cloud, and IT companies will host them...temporarily

[asturcon3]

About Cortez: http://es.wikipedia.org/wiki/Conquista_de_M%C3%A9xico#Destrucci.C3.B3n_de_naves_y_conato_de_deserci.C3.B3n (spanish).

It's a topic based on an historical fact, those ships where scuttled and sunk.

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[cycnus]

Hi Tomi,

I just read on somewhere @ the internet that Microsoft only manage to sell 600K+ license of WP7 since the nov 2010. This number is already including the number of device that still stuck on the store.

Do you really think that with nokia on board of WP7 will make MS sell hundreds million of devices each year... or maybe 25% of that???

I think MS need the Nokia WP7 prototype more than nokia need it. I seen your modeling number, but with this new information, I think:
1. Yes, symbian take a dive
2. But, no, WP7 won't help nokia

which mean,.... the end of nokia smartphone division.

[Essay writer]

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Last week, Nokia announced that 7,000 jobs would be cut from the handsets side of Nokia, saving the company about 1 Billion dollars in salary costs. 3,000 of those were the shifting of Symbian and its staff from Nokia to Accenture, where Symbian development is now effectively outsourced....

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[micimacko]

"he had to get rid of MeeGo, Qt and of Symbian" - Nokia did not get rid of Qt (only the desktop consultancy/support part that was of no interest to it anyway) nor any Qt 'R&D' staff, and if you follow developer news, is actually going full steam ahead with it (QtSDK 1.1 release, components imminent, etc).

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[Jonas Lind]

In the contract between Nokia and Accenture there is most likely a huge payout to Accenture for taking on all this staff. From the grapevine in Helsinki, I have heard that the Nokia unions have prevented any mass firing of staff. A huge professional service firm as Accenture probably has the rights capabilites to to move these professionals over to other areas.

However, they will most likely use this infusion of mobile software competence to expand their mobile service offering. My guess is that they will target the corporate market. such as mobile solutions for the staff in larger companies.

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[nalle_puh]

A few notes

1. Note that Elop said this in the US, which makes it clear it wants to please US ears. Here is your phone, designed by you, for you, running your OS. That doesn't mean it's meant for the world OR that Nokia gave up on the world. Flattery will go a long way, even if you don't really mean it.

2. Google is doing the same, selling Android as 'American' and motor of US innovation. You can see in the comments that people don't care who actually made the devices. This is also a vulnerability, as those manufacturers can cut off Android at the legs if suddenly a competing platform offers them better profits, just as they did with Symbian (yes, plenty of today's big Android manufacturers used to be in the Symbian camp, and something similar almost killed Moto - how quickly people forget). The US benefiting from Android is correlational, in fact Android, even by Google's own admission, is around breakeven or slightly in the plus. ALL the money and revenue is happening at the carriers and manufacturers. They might not be earning much, but Android spun them up, and helped them build supply chains and volume. Note that those things come handy REGARDLESS of your plaform.

3. You are missing the Qt piece of the puzzle. The desktop business is sold but Nokia shows no intention giving up on it in the mobile segment, on the contrary, you could see on the MeeGo summit that it's more alive than ever, Qt5 and QtQuick delivering a level of performance and candy in an _OS independent manner_. I don't think they just 'forgot' to sell it or ramp it down. Speculations welcome.

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