Jason Hiner suggests that Elop is not the frontrunner for Ballmer’s replacement. Why? First, he failed disastrously at Nokia losing billions and laying off 20,000. Second, Hiner says that the next CEO should be all about the enterprise.
Jason Hiner, The case against Stephen Elop as Microsoft CEO
Two Wall Street analysts — Ben Thompson and Benedict Evans — are already questioning whether Microsoft actually bought Nokia because Nokia was threatening to stop making Windows Phones, and not because Microsoft wanted Elop.
Just a quibble: If Elop and the Nokia board pulled that off, hats off to them. And don’t forget the remaining Nokia still has the right to make phones, so maybe they’ll start building Android phones now.
Another factor that works against Elop as CEO is that about 10 of Microsoft’s 16 separate billion dollar businesses are now enterprise businesses. The company needs an enterprise leader, as I wrote in the Monday Morning Opener. Elop has limited enterprise experience, other than a stint as a CIO earlier in his career and a one-year tour at Juniper Networks. He has mostly worked with end user applications at Lotus, Macromedia, and Microsoft, where he primarily oversaw Microsoft Office. Elop technically ran “business” software at Microsoft, but it was not the kind of back-end cloud infrastructure that is destined to dominate Microsoft’s future, mostly centered around Azure.
Officially, Microsoft announced Elop will now run the company’s Devices and Studios business unit, which will be beefed up with the addition of 32,000 Nokia employees. The question we should be asking is whether this move indicates that there is another shoe still waiting drop.
Yes, the other shoe would be making Elop CEO of Microsoft (or maybe President for a year, then CEO). That may be the board’s plan.
Is Microsoft planning to put its healthy, high-margin enterprise businesses at the center of the company and spin off its low-margin consumer businesses into a new venture? Making Elop the CEO of that spin-off (which would likely include phones, tablets, and Xbox) would at least make more sense than Elop as the CEO of the enterprise-heavy Microsoft as we know it today.
I think that the Azure cloud computing business at Microsoft is *not* the future for the business. That is a battleground with a bunch of other lumbering dinosaurs — HP, IBM, Cisco — chasing Amazon and never getting close. At present Azure is principally the platform used by Microsoft for its own cloud efforts, like Office 365.
The future of Microsoft is exactly the “end user” oriented enterprise software that Elop has experience with. I’m not arguing he is the best candidate, but wondering what the board is likely to do.
I maintain that spinning off the low margin consumer business would be a smart move, but I doubt the board is headed there. They are going to give another big push on the current devices and services business plan, and perhaps lose another $20B before whoever the new CEO is gets fired. Say it’s Elop, just as a strawman. Mid 2014, the board finally decides to give up on the consumer market after another year of mounting losses on Surface tablets and Nokia phones. That’s when they will finally become an enterprise software company, and spin off and shut down the rest.
Hardly any touch screen PCs are being bought, so the world is breaking into a small number of successes: growing number of touch-oriented smartphones and tablets, stable numbers of keyboard + touchpad laptops, and a falling number of keyboard + mouse desktops. Strangely, PC manufacturers continue to over estimate people’s desire for oddball hybrids and touch laptops.
from the article
Acer and Asustek this week said touchscreen laptops championed by Microsoft Corp. haven’t made as a big a splash with consumers as previously estimated.
"Our first wave of Vivobooks was not a success," said Asustek CEO Jerry Shen at an investor conference Friday, referring to the company’s line of touch notebooks. "We are working very closely with Microsoft and Intelin an effort develop game-changing devices to launch in September.”
Mr. Shen said Asustek also plans to “attack” the nontouch notebook segment in coming months, as many customers still aren’t willing to pay extra for a touchscreen.
Acer and Asustek have pushed heavily into the low-cost tablet market this year to try to counteract the consumer preference shift away from laptops, but so far it isn’t clear whether sales of their Android tablets, which sell for less than $200, can offset the sales decline of more-expensive laptops.
Acer Chairman J.T. Wang said the company is shifting its product mix away from the traditional Windows system “as soon as possible,” with its percentage of devices running Google Inc.’s Android or Chrome operating systems to grow from about 10% this year to as much as 30% next year.
Asustek, which sells under the brand Asus, had up until this spring managed a better performance than many PC industry peers, partly because of a partnership with Google to make the popular Nexus 7 tablet. The sales helped boost Asustek ahead of Kindle-maker Amazon.com to become the No. 3 tablet maker behind Apple Inc. and Samsung Electronics Co.
But even with the success of the Nexus 7, Asustek is now struggling. After the release of the second-generation Nexus tablet, Asustek was hit by a crush of inventory of the first generation, as well as poorer-than-expected sales of Windows RT tablets, analysts said. Windows RT is a version of Windows 8 geared to work with ARM mobile-device processors.
Touchscreen laptops, which PC makers initially saw as their defense against threat from the mobile advance, haven’t taken off.
I expect that we’ll see a huge surge in Android and Chrome laptops, and the near-term collapse of Windows. It will be Apple OS X and iOS v Google Chrome and Android, and maybe Ubuntu as a distant third, starting with smartphones.
Morris gives a quick summary of some Android ‘desktop’ machines — mostly tablets that can dock with a keyboard, like HP’s Slate 21, various Acer products, and Samsung’s ATIV Q — but misses the point completely, sounding almost apologetic for suggesting these things might have utility.
I’ll go strongly in the opposite direction. Windows is (nearly) dead, especially on smartphones and tablets. Android will soon be the largest OS in the world. Inevitably, Android will become the largest player in the shrinking laptop/desktop market. Mac OS X and Android are the one-two punch for Windows, and that includes the desktop/laptop market, too.
Microsoft continues to move away from a commitment to its own OS and hardware platforms. We’ll be playing Xbox games on iPhones in no time.
Perhaps no coincidence this is announced a week before the rumored reorg in Redmond?
Flipboard is an invaluable tool in my curation, but it’s a strange thing to be limited to my iPhone, and sending all sorts of interesting pointers to Pocket.
I learned today that there is an android emulator called BlueStacks App Player for Mac OS X and Windows, and the android Flipboard app runs on it. Aside from having to switch to ‘natural’ scrolling (backwards from what I am used to), it just works! I downloaded Flipboard, logged in, and it all works. So now I can do Flipboard on my Mac. Sort of.
Amazon is entering the smartphone market, which is better called ‘palmtop computer market’. No work on the operating system, but the ‘kindle phone’ might follow the pattern of the Kindle: an open source version of Android mobile OS, redesigned to support the kindle phone.
But if they go that route, it’s hard to see how they’d stand out from the mazillion other android mobiles out there.
I feel like Elmer-Dewitt is writing an alternate reality scifi novel in this piece, where he makes it sound like Microsoft is still the worldbeater company of the last century, and Apple is the tiny upstart:
Phillip Elmer-Dewitt via Fortune
With Apple (AAPL) expected to introduce a new iPhone in conjunction with the scheduled release of iOS 6 this fall, the stage is set for a holiday face-off between these two long-time rivals in the battle for second place after Google’s (GOOG) market-leading Android smartphones.
Once again, Microsoft will be trying to stretch its lead on the desktop by taking a version of Windows into the mobile device marketplace. Apple, meanwhile, will be playing into its strength in devices that operate smoothly together in an easy-to-use software ecosphere.
Let’s clarify things:
I don’t really see what Elmer-Dewitt is up to, but Apple is the clear market leader in the high profit laptop >$1000 sector. Who cares if Dell or no name manufacturers are selling bazillions of $450 laptops with $15 of profits?
Apple has the money and vision to create amazing products, and that’s not from selling badly designed, low-cost phones, laptops, or tablets.
And I am sure that Microsoft would love to perceived as going head-to-head with Apple. I think Windows 8 — what I have seen of it — looks cool, and might develop into a viable platform. But the characterization of Microsoft and Apple as side by side in the starting blocks for a race against Android is simply fiction, not analysis.
Looks like Apple iPhone may be emerging as the winner in the workplace, as Android growth slows:
Brian X Chen via NYTimes.com
A sampling of about 3,000 businesses by Good Technology, a major information technology firm that provides mobile management software, found that iPhone usage was increasing in the workplace, while Android phones have seen a significant dip since last year.
A lot of buzz on the interwebs today about Facebook’s apparent third effort to build their own smart phone, and people trying to dissect the reasoning behind it.
For Facebook, the motivation is clear; as a newly public company, it must find new sources of revenue, and it fears being left behind in mobile, one of the most promising areas for growth.
“Mark is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms,” a Facebook employee said.
Facebook is going to great lengths to keep the phone project a secret, specifically not posting job listings on the company’s job Web site, but instead going door-to-door to find the right talent for the project.
But can a company that is wired as a social network learn how to build hardware? Mixing the cultures of hardware and software designers is akin to mixing oil and water. With the rare exception of Apple, other phone makers aren’t very good at this.
The biggest names in consumer electronics have struggled with phone hardware. Hewlett-Packard tried and failed. So did Dell. Sony has never done very well making phones.
“Building isn’t something you can just jump into,” explained Hugo Fiennes, a former Apple hardware manager for the first four iPhones who has since left Apple and is starting a new hardware company, Electric Imp. “You change the smallest thing on a smartphone and you can completely change how all the antennas work. You don’t learn this unless you’ve been doing it for a while.”
He added, “Going into the phone business is incredibly complex.”
Bilton suggests that Facebook could simply buy RIM or HTC as a shortcut on the hardware side.
Connor Simpson, Do We Really Need A Facebook Phone?
do we really need a Facebook phone? From Facebook’s perspective, the parts are there, and so is the demand. You’d be hard pressed to find a young person who doesn’t have the native Facebook app, Instragram, and Facebook Messenger already on their phones. It makes sense that they’d want to put something in the market that comes preloaded with all of those apps anyway, along with further Facebook integration. Plus, a Facebook phone probably may not help solve their current mobile problem. Facebook isn’t making any money from their mobile efforts. All of the Facebook apps are free, and they’re still trying to figure out ways to generate any significant income from their mobile efforts. They wrote in their S-1 filing that if users increasingly started to use Facebook on their mobile devices, they have no way to generate any meaningful revenue from those users. Charging upfront for a Facebook phone would generate revenue, but the real question is whether the cost to get a Facebook phone out would be too expensive to make it worth it.
There is a saying, generals spend a lot of time planning how to fight the last war and are therefore surprised by the new one when it occurs. In this case, Bilton and Simpson are focused on the current smartphone marketplace, the one dominated by Apple and Google, where social has largely been an afterthought, and where social capabilities have been provided by apps, like Facebook in a browser. (Leaving aside Apple’s partial integration of Twitter into iOS.)
The next war will be won by the players that build the best social experience into the guts of next generation smartphones. Social capabilities will be wired into the device at a foundational level, not at the application level. And this is why Facebook must develop its own operating system and mobile devices that run it. It must square off with Apple, Google, and, yes, Microsoft still has a chance, here.
What is amazing to me is that this goes largely unconsidered in these articles: the authors don’t really focus on what a social operating system means.
Smart mobile devices have unique handles for their owners — the phone number, email, and social signifiers (like @stoweboyd) — so, in the not too distant social future I could opt to follow a friend, like @gregarious, independently of applications. By doing so, my social smart phone would receive all sorts of updates from @gregarious — status updates, calendar posts, geolocal information, blog links — and my social O/S would attempt to handle this stream using whatever apps I might have associated with the various flavors of updates. But the fundamental follow would be managed in the O/S, natively.
Note that this could also work across different operating systems: @gregarious might be following me from a Google Android device, a Windows phone, or a Facebook phone. Each O/S might have different sorts of capabilities — Google might have Circles and Huddles, Facebook might have Pages, iOS might be based on Twitter esthetics — but the core functionality of receiving status updates and direct messaging would likely become universals.
At any rate, this battle is just over the horizon, and Facebook needs to build its offering as fast as it can, because Google, Apple, and even Microsoft have a huge head start.
(PS I still don’t understand why Apple doesn’t acquire Twitter, and really bake it into iOS.)
Update 1:03pm — Mathew Ingram weighs in, but never discusses the operating system battlefield.
Update 1:05pm Henry Blodget thinks a Facebook phone is a horrible idea, and after a long list of reasons — mostly saying hardware is harder than software — he closes:
Perhaps Facebook doesn’t really have any intention of building a full-fledged phone—perhaps it just wants to partner with someone like HTC or Samsung. But even then, all the same challenges apply.
Facebook already has an “operating system” for mobile—it’s called the social graph.
So instead of building a phone, which seems like a desperate move, Facebook should partner with every operating system and carrier and hardware maker it can to try to embed this social platform within every mobile platform. And it should build great apps to float on top of these systems. (And if Apple keeps giving it the brush-off, it should probably start by cozying up to Samsung, which is the only company giving Apple a run for its money).
Yes, everyone wants to be Apple.
But there’s only one Apple right now.
And Facebook’s chance of becoming the next Apple seems even smaller than Apple’s chance to become Apple was.
The fact that Facebook is even thinking of going into the hardware business is a bad sign. If Facebook actually does go into the hardware business, it will be a really bad sign.
If today’s enterprise Windows users move onto Windows 8-oriented hardware, enterprise workgroup software might become very very differetn:
How Windows 8 Transforms Enterprise Computing - Quentin Hardy via NYTimes.com
Windows 8 could mean a lot of changes for business computing, in particular touch computing, like the swipes on an iPad. Microsoft appears to have adopted a refreshing awareness of current events, and with a nod to Apple and Google, designed a user interface that is also centered on apps. If you don’t like that you can go back to the old drag-and-drop desktop-era screen, but it is the new default.
H.P. is not talking about its future designs, but Dell sees the next version of Windows encouraging sales of ultrabooks. These lightweight laptops running Windows 8 are likely to adopt touch screens, like an iPad, while keeping the keyboard preferred for working on things like corporate spreadsheets. “Our view is that the mobile endpoint devices will become more important,” said David Johnson, Dell’s vice president of corporate strategy. “When you are creating content, a keyboard is critical.” For other things, like reading a newspaper, he says, the keyboard might go away.
In the demo, Microsoft showed personalization features that included instant feeds of information from Web-based accounts, including Facebook and Twitter, as well as Microsoft’s own cloud-storage system, called Skydrive. There is every reason to think that an enterprise version of this idea would instantly load updated workflow and task information that is stored elsewhere. That could be very attractive to companies, possibly leading to system-wide upgrades.
Mr. Sherlund said he thought the integration with Facebook, in which Microsoft bought a 1.5 percent stake for $240 million in 2007, could mean that Facebook could begin to have a workgroup function, something Google is also after in its Google+ social networking software. “With the touch capabilities thrown in, this is all about the cloud,” he said.
Imagine Microsoft building an enterprise Facebook, and attacking the work media market with it. Given their position with Office and Sharepoint, they could make a lot of trouble for Yammer, IBM, and the two dozen other start ups and established players trying to dominate that exploding market.
However, I wonder if Microsoft can move fast enough. I won’t rule them out, though.
But the real battle here is Windows 8 versus iOS (and Mac OS X) and versus Android.
The ultrabook niche — especially the arrival of convertible ultrabooks, like Lenovo’s IdeaPad Yoga — will have to compete against the iPad and MacBook Air. These devices have touch sensitive screens — like the iPad — but also allow a conventional keyboard to be used, as well.
My prediction is that Apple will develop a convertible product — what I call the iAir — and it will become the next killer device, the one that defines the post-pc era.