Nokia past CEO and past Chairman, Jorma Ollila had been very quiet about Nokia since he retired as Chairman. But now he's given an interview to Finland's largest newspaper, Helsingin Sanomat, which is translated into English here. The interview is partly motivated by the release of Ollila's memoir just released (in Finnish).
Ollila makes some interesting observations. First, that there were many causes for Nokia's ultimate failure, that were quite intertwined. But if he had to pick one ultimate failure, he identifies it as the lack of success in becoming a software company, even after sending 1,000 of Nokia staff to Silicon Valley to try to learn the software business.
Ollila talks of Nokia problems becoming significant at the advent of the iPhone from 2007. He points out how much operators/carriers impacted Nokia's handset business, back from the first punishment of Nokia by operators in 2004 - cutting back on purchases back then - onto how operators/carriers wanted low-end mass market phones from Nokia, plus customization. He also talks of Nokia's attempts to update Symbian, but then falling ever more behind on schedules and execution. (These are all matters we've covered here on this blog ad nauseum).
Ollila identifies the period of December 2010 to January 2011 as the time when the decision was made to abandon Nokia's own MeeGo (and Symbian) based future in favor of Microsoft's Windows Phone,. Ollila is quoted saying of that decision "Great risks were involved when we assessed the company's competitiveness on the Board with these operating systems over a period of 2 – 3 years." Without quoting Ollila explicitly, the article points out that the Windows strategy was "a big mistake" but then brings Ollila's words to echo that by writing "'This is true. We were not successful in using Microsoft's operating system to create competitive products, or an alternative to the two dominant companies in the field', Ollila says." The article then points out that "Nokia smartphones generated big losses because of the low demand." From February 2013 Nokia Board began negotiations to sell Nokia's handset unit to Microsoft.
(again, we obviously have known this here on the blog..)
And Ollila takes responsibility for being part of the decision-making that led to the problems. Helsingin Sanomat writes "Ollila admits that he had been involved in making some wrong decisions. Nevertheless, he is not clinging to the past. He is therefore accepting of mistakes made by himself as he used to be of those made by his subordinates." Read full article here.
Ollila makes some interesting observations. First, that there were many causes for Nokia's ultimate failure, that were quite intertwined. But if he had to pick one ultimate failure, he identifies it as the lack of success in becoming a software company, even after sending 1,000 of Nokia staff to Silicon Valley to try to learn the software business.
Ollila talks of Nokia problems becoming significant at the advent of the iPhone from 2007. He points out how much operators/carriers impacted Nokia's handset business, back from the first punishment of Nokia by operators in 2004 - cutting back on purchases back then - onto how operators/carriers wanted low-end mass market phones from Nokia, plus customization. He also talks of Nokia's attempts to update Symbian, but then falling ever more behind on schedules and execution. (These are all matters we've covered here on this blog ad nauseum).
Ollila identifies the period of December 2010 to January 2011 as the time when the decision was made to abandon Nokia's own MeeGo (and Symbian) based future in favor of Microsoft's Windows Phone,. Ollila is quoted saying of that decision "Great risks were involved when we assessed the company's competitiveness on the Board with these operating systems over a period of 2 – 3 years." Without quoting Ollila explicitly, the article points out that the Windows strategy was "a big mistake" but then brings Ollila's words to echo that by writing "'This is true. We were not successful in using Microsoft's operating system to create competitive products, or an alternative to the two dominant companies in the field', Ollila says." The article then points out that "Nokia smartphones generated big losses because of the low demand." From February 2013 Nokia Board began negotiations to sell Nokia's handset unit to Microsoft.
(again, we obviously have known this here on the blog..)
And Ollila takes responsibility for being part of the decision-making that led to the problems. Helsingin Sanomat writes "Ollila admits that he had been involved in making some wrong decisions. Nevertheless, he is not clinging to the past. He is therefore accepting of mistakes made by himself as he used to be of those made by his subordinates." Read full article here.
It's terrible that they felt unable to execute, due to the earlier failures on Symbian.
Qt > Meego was a very valid path, one that was starting to bring tangible benefits and renewed confidence by 3rd party software developers, when it was killed by Elop.
It's clear the deciders are no software men, they would have recognized the great Qt ecosystem otherwise. No, apparently, they simply judged by Nokia past failures, which were due to different teams. Terrible.
Also, don't underestimate the power of a CEO : Elop had ample access to the right ears and tools to spread its own view onto the Board. No wonder they "felt" it was the only road : the man in charge told them.
Posted by: ThisIsBad | October 18, 2013 at 02:20 PM
"Great risks were involved when we assessed the company's competitiveness on the Board with these operating systems over a period of 2 – 3 years."
This was Ollila's comment on Symbian & MeeGo assessment at beginning of 2011.
Please. Show me ONE time in this blog Symbian and MeeGo had great risks involved over ANY period starting from Q4 2010.
One.
Posted by: AndThisWillBeToo | October 18, 2013 at 02:46 PM
It's frustrating that the board and Ollila looked at Nokias competencies in an extremely harsh way but somehow had a glowing view of the competition. MS has failed in execution many times before. Vista with it's years of delay being a prime example. Wasn't Windows Phone 7 also delayed multiple times only to show up missing many key features?
I get being hard on oneself and ones company, but that same critic should be used when jumping into bed with someone else. If Nokia were searching for software competence and execution, surely MS was the WORST partner they could have picked.
I'd also argue that Apples and Googles software competencies in mobile weren't all that great either. They certainly weren't at the beginning. Apple lacked key features and functions for many years but were able to thrive because of other strengths within the company. The speed with which andriod is developed is nothing short of impressive, but it's still far from a perfect OS and continues to suffer from some early decisions. It seems both of these companies mostly have the execution part down. Every year, release something that is marginally better than what came before it. If you can take half a step forward every year and no steps back, it seems to be a recipe for success. Unfortunately for MS, it needs to take about 10 steps forward.
Posted by: Ben | October 18, 2013 at 04:10 PM
Quick comment :
It's not Symbian > Qt > Meego.
Qt is a runtime layer, on top of Symbian AND Meego. Or any other operating system !
That's why it was such a masterful stroke : Qt was bridging the gap between Symbian and Meego, or whatever future ! Exactly what's needed to bring confidence to 3rd-party software developers : they want interface stability !
Having seen what they could do with it on a developer N9 many quarters before its release, I knew they were on right track.
That's why it was so hard to hear Elop throwing everything for an unknown future which, right of the box, was announced WITHOUT Qt !
Because yes, it would have been possible to bring Qt on top of WP, preserving Nokia Ecosystem, but no, Microsoft decided it would be Silverlight, or Death.
They got death.
Posted by: ThisIsBad | October 18, 2013 at 04:42 PM
"After very lengthy and meticulous consideration we decided on Microsoft, which happened to have the broad support of our outside advisers, the company's management, and Research and Development."
So the board was clueless too. This is not surprising, otherwise they would have intervened. I wonder who the outside advisers were.
Even if they have lost their trust into their own software people, switching to Microsoft exclusively was a very clear mistake - as many have pointed out already in Feb 2011.
Posted by: N9 | October 18, 2013 at 05:19 PM
"After very lengthy and meticulous consideration we decided on Microsoft, which happened to have the broad support of our outside advisers, the company's management, and Research and Development."
So the board was clueless too. This is not surprising, otherwise they would have intervened. I wonder who the outside advisers were.
Even if they have lost their trust into their own software people, switching to Microsoft exclusively was a very clear mistake - as many have pointed out already in Feb 2011.
Posted by: N9 | October 18, 2013 at 05:19 PM
Oillila was one of those to blame for the destruction of Nokia. Why should we unconditionally believe him?
For instance, what role did the MS "bribe" of 2B play in the selection process? And Elop had been hired long before December 2012. No one believes you hire an MS CEO if you do not plan a sellout to MS.
Posted by: winter | October 18, 2013 at 06:09 PM
The board had witnessed their programmers managing to rewrite the UI three times, while creating two incompatible UI layers, one for Symbian and one for Maemo. In the mean time, the Qt strategy did not get traction. While at the same time,developers were flocking to iOS and making more money there than on the Symbian platform.
Nokia was no stranger to boasting about the number of Symbian developers in the naughties, about 100.000, they always said. Multiple times too, for years. And they never mentioned the number while Qt was supposed to be the new thing. Apple said at that time they had 35000 developers. To me that means the real number was very low, 1000, 2000. Certainly not 10.000.
I do not believe it is strange that they abandoned that strategy. It wasn't working. Their own staff were unable to create a proper OS in a timely, predictable manner and there would be no ecosystem.
Posted by: Sander van der Wal | October 18, 2013 at 07:07 PM
I have a problem with this interview.
In one hand, Ollila says it was a "mistake", and that they couldn't guess it would end this way. In another hand, we know that according to his contract, Elop would get a bonus if he screwed Nokia and then sold it to MS. Siilasmaa even added that "no significant change" was made on Elop's contract before the deal, which means that they all knew Nokia was about to be sunk.
So it's not a mistake any more.
Let's now imagine that Ollila hadn't seen Elop's contract - that's quite unbelievable, but let's imagine he hadn't :
- is the lack of plan B a mistake, or incompetence ?
- As most financial institutions, specialists, analysts and operators were sceptic about the WP deal, how could they still keep on making this mistake?
So is Ollila honest?
Posted by: vladkr | October 18, 2013 at 08:32 PM
ollila was tempted by microsoft to sell the company, he and Elop had the same goal: sell the company, the Trojan Horse theory becomes stronger, Ollila was the missing piece in this theory, now we know why Elop was never fired
if Ollila or someone on the board had wanted to save Nokia, Elop didn't even have lasted six months in charge
I read an article where Ollila will be on the board of directors at Microsoft.
the perfect plan made to perfection
Posted by: chunk | October 18, 2013 at 08:58 PM
Well, what can you expect from the guy responisble for nominating THTRH Flop as CEO?
Which means, from the man who sold Nokia to MS in 2010?
Yes, this is the true story Jorma cannot reveal. Lest being accused of destroying Nokia. Thus risking to face a responsibility action from shareholders.
But what actually happened is that Nokia died sometime in 2010, when the board decided to sell it to MS.
His interview is really boring. Just a repeat of MS propaganda. Can't stand it anymore.
He speak about "risk", but in the end he makes the riskiest of all moves:
a) ditches while badmouthing the existing (and thriving) ecosystem, where Nokia is in total control
b) adopts the less promising OS, developed by a company with a known fail record in mobile
c) knowingly adopts a (P)OS (WP7) that is incomplete (far more than Meego)
d) what's more, he adopts it as the company's ONLY OS, thus putting the company at the mercy of a single unreliable supplier (MS)
e) in doing so, Nokia's future becomes that of a low/no margin captive OEM
f) real profits (if any) will go to the ecosystem's owner (MS), peanuts to the captive OEM
g) meanwhile, all goodies are given to MS (Maps, patents, know how, carrier relations, you name it...)
This cannot be the result of a bad business decision. Too many decisions, all favoring MS against Nokia, against logic and common sense.
What a shame. What a pity.
Jorma: you will be remembered for you latest disaster, not for your initial merits.
Posted by: Earendil Star | October 18, 2013 at 11:31 PM
Jorma ollila is a traitor of Nokia and Finland. This guy followed the instruction of his master and destroy Nokia from inside. I claimed it on the day of 2/11/2011 and am still thinking so. Finish needs to take action by suing Jorma Ollila, Sillasma and the Elop.
Posted by: peter | October 18, 2013 at 11:33 PM
@ Baron95
Serious as a heart attack.
Just because MS is the largest, doesn't mean they are the best or the most competent. Yes, I agree they keep throwing money and manpower at their problems. It works for Windows on PCs because they have a monopoly. It worked for the Xbox (after about a decade) because they were extremely persistent, patient, and got a little lucky with the competition.
Windows Phone 7 was a failure. Windows phone 7.5 was a failure. Windows Phone 8 was a failure. Windows Phone 8 GDR1, GDR2, and now GDR3 are failures. Do you still call this competence? I could go on with Microsoft's other product lines if you like. Heck, even little old Nokia with its European ignorance and admitted software INcompetence were able to shift more units with its own software in it's final glory days than MS has been able to the last couple of years. Think of all of the money, all of the manpower, all of the partners helping, and all of the cannibalized marketshare that has been thrown into Windows Phone and it is STILL a failure. If the software was any good, we'd at least be seeing some kind of uptick with this Herculean effort. Unfortunately the facts are, Windows Phone stinks. Despite it's best efforts, MS hasn't been software competent enough to correct that.
Posted by: Ben | October 18, 2013 at 11:48 PM
@Baron95
Microsoft is a bad choice because they've never had a history of making great, new software. Especially a version 1 effort like Windows Phone 7. With their immense staying power, they might refine it into something good. Or not, as happened with Pocket PC in the 90's.
As for your ecosystems rant, it's ridiculous and doesn't merit a point-by-point rebuttal. Several systems were killed for non-technical reasons before they had a chance to build an ecosystem. Several others are still under development and it's inappropriate to use the past tense to describe their achievements.
Posted by: R | October 19, 2013 at 08:34 AM
Well the only measure we can have of Nokia's software competence is to see how well Jolla does with SailfishOS if they can actually compete with the big guys
Posted by: TDC123 | October 19, 2013 at 11:02 AM
@leebase
The only thing MS is good at is burning money. They burned 6B on Bing with no perspective it will ever turn in a profit. The same with Skype. After 10 years and billions, the XBox is turning a meager profit. There is no perspective it will ever have a positive ROI.
The one thing we know is that MS have never benn able to earn money without a monopoly.
Posted by: winter | October 19, 2013 at 05:36 PM
@Baron95 Oct 18 7:53 PM
You said:
"You can't be serious, can you? So going to largest SW company in the world for SW competence is the WORST choice?
There were only two options for Nokia. Google or Microsoft. There were no others. None.
Microsoft is doubling down on their investment in Windows 8.1, Surface 2, WindowsPhone 8 evolution, Xbox One, etc. It will continue to be a differentiated and solid (but distant) #3 platform. Microsoft has virtually unlimited resources (including buying Nokia) to throw at it."
Don't forget, you're talking about the software company that had been essentially coasting for well over a decade on a combination of a huge revenue stream from just two products (Windows and Office) and a mountain of cash. During the timeframe in question, 2008-2011, the board should have taken into consideration the abysmal failure that was Vista, Microsoft's initial enormous QA issues with the Xbox, and the fact that through WP6 and WP7 Microsoft had continued to see its marketshare slip.
Twice in its recent past, Microsoft had failed to deliver a solid end user product when making a major change to its base architecture. Why should the board assume that they would magically get a brand new phone design right?
While Microsoft could still afford to make such a major blunder and recover on the second or third attempt, Nokia had no such luxury. Their coffers weren't that deep, nor did they have another cash cow that could sustain the company while their software 'partner' stumbled around for a while. Nokia needed, if not a winner, something that was at least acceptable right out of the gate.
Throughout 2008-2011, MeeGo was being developed in the open as a more or less bog standard FLOSS project. The early reviews ranged from neutral to positive. When the N9 based on MeeGo with the Harmattan UI was introduced in June 2011, the reviews for it ranged from positive to glowing. Unfortunately, by then it was too late because Elop had already convinced the board to let him tank MeeGo.
You keep saying that MeeGo wasn't a viable choice. I'd say that the available evidence says otherwise. Incredibly fast sellouts of the phones that were built and introduced into a handful of countries shows that Nokia had a potential global winner on its hands. If Elop had really had Nokia's best interests in mind, he would have at least opened a few more production lines to see how well an expanded roll out would do!
Posted by: sgtrock | October 19, 2013 at 06:31 PM
The usual MS shill speak... over and over again...
"Of all the OSes/ecosystems that raised to fight Apple/iOS and Google/Android did anyone do better than Microsoft?"
You see, the problem with this kind of public relations propaganda crap reasoning is that it's a poor attempt to make people forget that, when Apple came out with the iPhone and iOS, Android did not exist, while Windows Mobile had a huge lead over Apple in smartphones, since it commanded 10% of sales, yeah, when Nokia was the undisputed n.1 worldwide (probably because at the time it wasn't headed by an American Flop).
What happened thereafter? That Android (formerly inexistent) took the world by storm and now is the undisputed n.1. Meanwhile MS abandoned Windows Mobile and its efforts went to the WP (P)OS. Result: a meager 3% of market share after years of attempts, which was achieved after squandering a 30% Nokia market share served on a silver platter.
Conclusion: MS failed, WP is crap, W8 is also crap (excluding its desktop environment, which MS is trying to hide).
Me saying this? Actually no, it's Bill Gates himself speaking very loud with the firing of Steve Sinofsky first and Steve Baldmer now.
Game uncovered. Let's move on.
Posted by: Earendil Star | October 19, 2013 at 06:36 PM
@Earendil Star
The story is not over. Microsoft will continue to buy themselves into the market and put more innovative companies out of business. Nokia is just the latest victim. As long as Microsoft still has a monopoly on Windows and Word which generates a huge profit this will go on. Luckily, their grip on the market is continuously eroding - but very slowly.
Posted by: N9 | October 19, 2013 at 09:08 PM
Considering MS brought out Win 8.1 on Intel and RT/ARM just recently, but WP 8.1 won't be out until next year, one wonders what their commitment to the phone market really is. Win RT sold less than BB10, yet they upgrade it before WP and place the WP team on an 18 month update schedule. Also, the programming API's are different on each platform making it harder for developers to produce apps, one of the main complaints mentioned when WP phones are returned for a refund/exchange. Looks like their priorities are a little mixed up if they want to make a dent in the phone market. I also had a big laugh when I noticed that a Win 8.1 update requires a 3.5 GB download from the app store, something that would take over a day on my reasonably fast DSL line. Seems they are still producing the usual bloatware too.
Posted by: James G | October 20, 2013 at 12:54 AM