The Continued Softening Of Microsoft


Microsoft should not be acting old and grey.

Yet they are throwing away another $26.2 billion dollars in purchasing the relative revenue and profit weakling, LinkedIn, the professional networking social media site (where odds are you have your high-level resume-type information).

Have you ever paid a dime to LinkedIn or have you ever paid attention to  single advertisement on LinkedIn (I can’t even remember if there is advertising on there—see I pay it zero attention!)?

Unfortunately Microsoft is following suite with it’s worthless purchase of Nokia in September 2013 for $9.4 billion that was all written off and then some with yet another ridiculous, desperate move.

Microsoft has been living off their legacy product suites of Windows, Office, Outlook, and SharePoint for years…and apparently, aside from the regular forced upgrades, they seem to have virtually nothing in the innovation hopper.

Hence, loser acquisitions of things like Yammer in 2012 for $1.2 billion (anyone use that BS Facebook-like service for inside their organization—work is not social playtime folks!).

Anyway, I like Microsoft products–they are functional, which is what I want from email, creating and editing documents, spreadsheets and slides, as well as sharing files–it’s great for bread and butter tasks–nothing sexy.

But every attempt that Microsoft makes in desperation to expand beyond their core competencies comes up soft and a big money loser.

Innovation and success is not bred by acquiring virtually worthless properties in terms of high-technology with no synergy to who they fundamentally are.

It is almost heartbreaking to see a once great company like Microsoft continue to drown in its own excess cash and strategically hollow ideas.

Microsoft will only be successful by thinking beyond the boxed in windowed organization that they have imprisoned themselves in.

I hope they can break a few windows and escape to some new technological thinking again soon–but the big question is whether they currently have the talent to make it so. 😉

(Source Photo: Andy Blumenthal)

Microsoft + Nokia = HP + Palm

Microsoft + Nokia = HP + Palm

Microsoft buying Nokia is a desperate play at mobile computing.

Unfortunately, the purchase doesn’t add up in terms of common business sense.

Remember, in 2010, when HP bought Palm for $1.2B?

Palm once held 70% of the smartphone market to fall to only 4.9% share at the time that HP bought it and committed to “double down on WebOS.”

Now, fast forward to 2013 and Microsoft is buying Nokia for $7.2B, with a mobile software market share of about 4% combined (compared to their prior Windows desktop operating system market share of over 90%) and ZDNet reporting that it was “double down or quit.”

When HP bought Palm, it was a hardware maker buying software; now with Microsoft buying Nokia, it is the software maker buying the hardware vendor.

But in both cases, it’s the same losing proposition.

In 2010, at the time that HP bought Palm, Stephen Elop was leaving Microsoft to become CEO of Nokia (and in 2011 Nokia made the deal for a “strategic partnership” with Microsoft).

Now in 2013, when Microsoft is buying Nokia, HP has thrown in the towel and just sold off the remnants of Palm O/S to LG Electronics.

Ballmer is right that Apple and Google do not have a permanent monopoly on mobile computing, but purchasing Nokia is not the answer.

Microsoft’s stock is down more than 5% on the day of the merger announcement…and there is more pain to come from this acquisition and Microsoft’s hubris.

Buy more outdated technology, and you’ve bought nothing, but change the culture to innovate, design, and integrate, and you’ve changed your organization’s fortunes. 😉

(Source Photo: Andy Blumenthal)

Nokia and Microsoft, Desperate Bedfellows


A couple of hours ago, Nokia’s debt was downgraded by Moody’s to Junk!

Nokia was once the world largest vendor for mobile phones with almost 130,000 employees, but since the iPhone and Android, they have since fallen on hard times–who would’ve thought?

Just 16 months ago, in February 2011, Nokia announced a strategic partnership with Microsoft to try and stem their losses by adopting Windows Mobile, but this was like a drowning victim grabbing on to whoever is nearby to try and save themselves but only ends up in a double drowning.

No, Microsoft is not drowning exactly, but their stock has been more or less flat from a decade ago and one of the worst large-tech stock performers for the last ten years!

Will the acquisition of Yammer for $1.2 billion this week change this trend–I doubt it.

Between Yammer for social networking and the acquisition of Skype for video-calling last year (May 2011) for yet another $8.5 billion, Microsoft is trying to fill some of it’s big holes in its technology portfolio, just like Nokia was trying to fill it’s gaping hole in mobile operating systems by partnering with Microsoft.

Unfortunately both Microsoft and Nokia have essentially missed the boat on the mobile revolution and the sentiment is flat to negative on their long-term prospects.

So the shidduch (match) of Nokia and Microsoft seems like just another case of misery loves company.

Desperation makes for lonely bedfellows, and thus the announcement this week by Nokia that they are going to layoff 10,000 and close 3 plants by end of 2013 was really no surprise.

Aside from the short-term stock pop from the news of the acquisition, what do you think is going to be in the cards for Microsoft if they don’t get their own innovative juices back in flow?

Can you just acquire innovation or at some point do you need to be that innovative company yourself once again?

Rhetorical question.

Hopefully for Microsoft they can get their mojo back on–meaning rediscover their own innovative talents from within and not just try to acquire from without.

(Source Photo: here with attribution to Kidmissile)

When a Phone is Not Just a Phone

Vertu = luxury phones, at least on the outside, for now. 
The phones are handmade, one at a time, by master craftsmen in England for the luxury division of Finnish phone maker, Nokia.  
Made from stainless steel with a sapphire crystal screen making them virtually unscratchable (except by diamonds) and keys that pivot on ruby bearings, the Vertu watches are undeniably eloquent and unique.
Bloomberg BusinessWeek (3-9 October 2011) pegs the average cost at for a Vertu at $6,800 with their Signature line costing more than twice than amount!
Started in 1998, they have sold more than 300,000 phones in the last decade, and have seen “high double-digit sales growth.”
The main problem with the phones according to IDC researcher is that they are “remaining decidedly low-tech”–running on “Symbian, the old Nokia smartphone operating system being phased out in favor of Microsoft’s Windows Phone 7″–another market non-starter!
Currently, they are seen as more jewelry than smartphone, and so “a lot of Vertu owners have another device for everyday use.”
However, another area where the Vertu phone has the special something is in terms of service–concierge service that is.  Free for the first year and then costing about $3,0000 a year thereafter, you get a 24-hour hotline in nine languages for handling everything from restaurant reservations to travel planning and sending exotic gifts, such as “a box of live butterflies”–well not something I would do everyday, but I may just not be such a great gift giver 🙂
Also, many models come with dual-SIM cards so you can have one phone for example for both business and private use with different phone numbers, networks, billing plans, etc.
Certainly this phone makes a big statement in terms of handsome looks and a very special service offering, but to really be luxury inside and out in the mobile computing marketplace, it’s got to do a deal with Apple and/or Android, period.
Vertu customers paying big bucks for a great phone, deserve not only the best looks, but the best smartphone technology.
Another big challenge is that with people upgrading their smartphones every 18-24 months, how do you maintain the Vertu’s value over time or is this a luxury purchase to be made on the order of Moore’s Law?
Oh baby, that’s a lot of Vertu!

>Change Management and Enterprise Architecture

>Change denotes the transition that occurs between one state to another…[There are two primary] “cultural attitudes towards change [either]:

  • Change is random, lacking determinism or teleology, [or]

  • Change is cyclical, and one expects circumstances to recur. This concept, often seen as related to Eastern world views such as Hinduism or Buddhism, nevertheless had great popularity in Europe in the Middle ages, and often appears in depictions of The Wheel of Fortune.

Change [does]…require organisms and organizations to adapt. Changes in society have been observed through slow, gradual modifications in mindsets and beliefs as well as through dramatic action (see revolutions). History is one of the tools used to document change.” (Wikipedia)

In the book, Making Change Happen, by Matejka and Murphy, the authors show how the United States is well suited to handle change, but also why we must be vigilant not to let our prosperity lead us into a lull.

“Since its birth as a nation, the United States has consistently been on the cutting edge of change. Why? Immigration, invention, and the belief in a better tomorrow…[we] have created the most diverse nation on the face of planet Earth…immigration has led to the invention. Each group brings different values, cultures, ideas, and prospectuses and is motivated to achieve the American dream. [Finally,] our belief in possibilities—a better tomorrow—has further stimulated change. This belief in what could be is an optimistic, creative approach to life itself.”

Ultimately, in our diversity lies our strength!

So what’s the issue?

“Evan a country such as the United States, generally more comfortable with change than other nations, has occasionally seen its collective organizations caught off-guard, dwelling in the past, asleep at the switch!”

Here’s one telling example:

“…a former member of the board of directors of Motorola (the leader in the cell phone industry at the time). At one board meeting, a board member walked in holding a small cell phone and exclaimed, ‘who the heck is No-ki-a and where are they? Sounds Japanese!’ When told that Nokia was a new competitor, located in Finland, the board member remarked, ‘Finland? How can that be? There’s nothing in Finland but ice and snow!’”

This is the new marketplace, “where firms you never heard of, from places you aren’t familiar with, can suddenly appear on your radar screens one day and steal your competitive advantage the next.”

So from a User-centric enterprise architecture perspective, there are two major imperatives here:

  • Information is key to survival—“The way to stay afloat now is to go into a ‘heads up, sensing, searching, sorting anticipating, adjusting, survival mode.’ Pay attention! Scan the environment. Gather information quickly and process it even faster. Your life depends on it. As external changes accelerate and competitive advantages shift, leading change becomes an organizational imperative.”
  • There must be an imperative to change—“The true paradox of ‘success and change.’…We must learn to change when we are performing successfully. But success makes us cocky and content. Change is the antithesis of the much-loved maxim ‘if it ain’t broke, don’t fix it!’ First organizations must be willing to change. But willingness depends on the belief that a change is necessary and that the proposal is the right change.” What makes change even more difficult is that strategic change is the enemy of short term efficiency (and profits).

In enterprise architecture, the architects are the change agents and the architecture is the roadmap for strategic change. The EA provides the information for the organization on internal and external factors that enable it to understand the nature, intensity, and impact of the oncoming change, and to take action to adapt, transform, survive, and even thrive. Further, EA is often maligned for shaking things up and there is often significant resistance to EA and change efforts; however, EA is doing exactly what it is supposed to be doing, which is helping the organization change strategically, even when things are going well, and where operational efficiency may possibly ‘suffer’ somewhat. Strategic change is for the long term survival of the organization and this needs ongoing care and feeding to be successful, and not just an adrenaline shot when the heart of the organization is already in cardiac arrest.