I will sound like broken record and say the same as what I said when Elop took over: this is bad. :)
I was proven somewhat wrong the first time and IMHO Elop did better than I expected, but not super great.
So why is it bad now:
NOK side: well, NOK as interesting company disappears. NSN for me is mediocre business that may plod for some time, but not attractive. HERE will be spun off IMHO or it will languish. I can't understand why MSFT did not get HERE with D&S purchase, but maybe NOK asked for too high price. Advanced Technology labs is not self sustaining and they will be killed soon unless they produce some patents for trolling. I also have quite low opinion about that part of the company.
MSFT side: they are making the same mistake NOK made with Symbian. You cannot be a hardware and SW ecosystem company at the same time. After they buy NOK's D&S the non-MSFT windows phones are kaput. No other companies will make them. And this is bad. MSFT is not Apple to survive just on their own hardware.
Second, good direction for MSFT would have been IBM'ization, i.e. becoming enterprise and services company more and more. And this moves MSFT in totally opposite direction. This is bad too. MSFT has huge weight in enterprise and they could have increased it with some strategic moves and acquisitions. Instead they throw money at risky, unproven and possibly lossy consumer hardware business. MSFT is not NOK (even after D&S purchase), it is not Apple. It will have very hard time to integrate D&S. I have always said that NOK's problem is that it does not get software, it is not a software company. Well, MSFT's problem is that it does not get hardware, it is not a hardware company. Don't look at Xbox and Kinect, look at Surface fiasco. This is what MSFT does with hardware: lose money. I doubt that they will be successful in integrating these two very different companies... :(
Finally, such acquisition during CEO transition period is also very bad. Even if Elop becomes MSFT CEO, he will get hands much more full than without the deal. So potential for crappy decisions and mistakes increases a lot.
Disclosure: large position in MSFT, position in NOK. NOK will be sold at first opportunity. I have not decided about MSFT position yet. |
