Ballmer may be on his way out, but he still has a few tricks up his sleeve. Microsoft announced this week that it will acquire Nokia’s devices and services unit, which moves Microsoft into the realm of becoming a phone maker to help with its struggling Windows Mobile and Window Phone market. But is it too little, too late?
News of Ballmer’s retirement this month caused a lot of polarizing reactions. Many thought it was beyond the time for him to be let go. With Microsoft’s stock idle for years, the large profits from enterprise were a nice bullet point while almost everything else went down the tubes. Microsoft spent billions trying to get Bing to unseat Google with only modest success. The company's copying of Apple, from the Zune (iPod), to Surface (iPad), to Vista (OS X), to Windows Mobile (kinda iOS) has almost unanimously been a failure on all fronts. It's massive companywide internal reorganization recently has also been a cause for concern. Many are scratching their heads as to why Ballmer made it this far with so many fumbles.
Others look to the success. In other tech circles, Apple fanboys looking at Android shout that it's not market share and sales (where Android is doing a slam dunk) but profitability. That is where Apple is targeting, toward large profits. But in that light, Microsoft is a success, because it is hugely profitable. It’s unequaled in enterprise and even though Windows 8 has been slow to take off, there is no question that Microsofts profits are soaring high.
But the problem is 2013 is a lot different from 2003. The PC revolution is winding down and the mobile revolution has begun. Everyone acknowledges that the Post-PC era is here. Apple understands that making software for its hardware, and keeping a closed and tight ecosystem, can help make great products. Microsoft, buying Nokia, is clearly aiming to copy that blueprint for success. But the problem is MS is playing catchup. I had a Pocket PC years before an iPhone, and it was great. MS actually had a computer in your pocket a decade ago. But somehow it dropped the ball. They also had tablets years before the iPad. But again, something went wrong.
Much of it had to do with everything being called Windows. Microsoft is proud of Windows and its legacy, and uses that branding for everything, from desktop to tablets to mobile. Windows everywhere. The problem is, a younger generation does not have any retro tie to Windows, no misty-eyed memories. Windows is just the computer their parents use. The biggest success Microsoft has had with a non-Windows brand is Xbox. It may be time for Microsoft to detach from Windows and blaze new paths. Ballmer going away will bring in new management and ideas, so things could get rolling. In a year or so. Windows has become legendary in some respects; its success is unequaled. But the term also has a lot of baggage, mainly recalling the frustrating years of computer problems. Apple became hip again (after nearly going out of business) so perhaps Windows can too.
But for now the focus is on Windows, and specifically Windows Mobile. Because that is the division — although not on life support — that is certainly struggling the most. The Surface Pro and Surface RT tablet, while having limited success so far, have shown MS can make a hardware/software combo. The combo of Nokia and Microsoft is a smart move if Microsoft wants control. But is it too late in the game? Have they lost too much ground? One thing is for sure, they are far from giving up. So the new breed of Nokia/MS phones will be an interesting batch, and a pivotal step, to Microsoft trying to dominate the smartphone market.