Satya Nadella Voted against Steve Ballmer’s $7.6 Billion Nokia Mistake

[Megalith]

In his book Hit Refresh, Microsoft CEO Satya Nadella admits that he advised Steve Ballmer not to purchase Nokia, the struggling smartphone maker: “I did not get why the world needed the third ecosystem in phones,” he said. He later wrote off the entire $7.5 billion acquisition and plotted Microsoft’s two-year exit from the smartphone market.

“The hope was that combining the engineering and design teams at Nokia with software development at Microsoft would accelerate our growth with Windows Phone and strengthen our overall devices ecosystem. The merger could be the big, dramatic move Windows needed to catch up with iOS and Android in mobile.” Mr. Ballmer, unsure about the acquisition, asked each member of the team to vote on whether it made sense. “I voted no,” Nadella writes. “I did not get why the world needed the third ecosystem in phones, unless we changed the rules … But it was too late to regain the ground we had lost. We were chasing our competitors’ taillights.”

 

[Romale23]

God how i wish they had not fucked up the windows phone. I would of LOVED a 3rd real option.

 

[nutzo]

The biggest problem was lack of apps. They should have spent that money subsidizing the windows app store and subsidizing app developers.

 

[arnemetis]

I love how these companies can just 'write off' billions in mistakes. Why is there not enormous punishment for these errors? Big moves should carry big risk and responsibility.

 

[NoOther]

I love how these companies can just 'write off' billions in mistakes. Why is there not enormous punishment for these errors? Big moves should carry big risk and responsibility.

I don't understand your premise here? Writing off billions isn't some sort of "free" thing they do, you get to write losses off against their earnings. Everyone is capable of doing the same thing. It is basically a deduction on their taxes given that what they actually made was less due to the losses. Why should a company have to pay taxes when they lose money? What sense does that make? As for "punishment", the company lose billions of dollars, how is that not punishment enough? I don't see where you are going with this...

 

[Pieter3dnow]

So all we have to do now is get on Twitter tell Satya never to release a new version of Windows and every time there is a problem with it just spam "told you so"....

 

[CrazyRob]

I'm just about to replace my Lumia 920 that I've had since the day Windows phone 8 launched. It's been a very reliable and stable phone, and lives up to expectations of the Nokia namesake. The lack of apps were the only issue the phone had. They clearly didn't make it attractive enough to developers, because so few ported their apps, despite the reported ease that it could be done in VS. I wonder if they had done something as simple as "apple/android take 30%, we only take 3%" if it would have made a difference.

 

[arnemetis]

I don't understand your premise here? Writing off billions isn't some sort of "free" thing they do, you get to write losses off against their earnings. Everyone is capable of doing the same thing. It is basically a deduction on their taxes given that what they actually made was less due to the losses. Why should a company have to pay taxes when they lose money? What sense does that make? As for "punishment", the company lose billions of dollars, how is that not punishment enough? I don't see where you are going with this...

I will admit I went off the handle a bit there, yes of course it's not just a free pass. I was considering deleting what I originally wrote here, but I'll leave it so maybe you'll get a laugh out of it. It just seems there have been a lot of these kind of huge company purchases lately that never pan out, and I guess I personally just feel that due to the grand scale of money/people's jobs/resources involved, there should be a greater loss when it doesn't pan out.

Original reply:
Those at the top come out just fine, prices go up for consumers, and those 'taxes' are basically lost, however if it was a fruitful venture they would have had to pay taxes. Mistakes like this are possible because mammoth risks of this scale don't have a real risk to the top or the company as a whole, just the lower peons and of course consumers, who always lose.

 

[NoOther]

So all we have to do now is get on Twitter tell Satya never to release a new version of Windows and every time there is a problem with it just spam "told you so"....

Did you actually read the article? His point was that they weren't all in on the mobile market at the time. They didn't have a solid solution with something new and they were entering into a battle with 2 established iants. That is completely different than Windows, where they are the current market leader.

He has a point, although I am not sure I totally agree with his point. Apparently neither did the rest of the leadership team. What I mostly disagree with is his idea, which would have been to develop an entirely new and different product to compete with them. I am not sure taking the time to develop something else would have been a viable strategy either. Windows phone was already fairly different from IOS and Android to be its own thing. What sunk it as others said, was app support.

 

[Deleted member 184142]

I will admit I went off the handle a bit there, yes of course it's not just a free pass. I was considering deleting what I originally wrote here, but I'll leave it so maybe you'll get a laugh out of it. It just seems there have been a lot of these kind of huge company purchases lately that never pan out, and I guess I personally just feel that due to the grand scale of money/people's jobs/resources involved, there should be a greater loss when it doesn't pan out.

Original reply:
Those at the top come out just fine, prices go up for consumers, and those 'taxes' are basically lost, however if it was a fruitful venture they would have had to pay taxes. Mistakes like this are possible because mammoth risks of this scale don't have a real risk to the top or the company as a whole, just the lower peons and of course consumers, who always lose.

Still all wrong.

CEOs and those making these choices get the bulk of their pay through how the company performs, as they get a base salary, plus stock (80-100% of most CEO's pay is in stock). If the company does good, they make lots of money because of stock value, if it does poor and stock value falls so does their pay. It is also their company and can spend the money how they see fit, that comes with gains and losses. Prices do not go up as they are in a market, if they have losses and raise prices, others would undercut them, however Windows phones were actually the budget and cheapest phones and when everything went under the phones were sold at close out prices. So how you say it is not a "real risk" to the company when the company is the one taking the impact. The peons and customers see almost nothing other than Windows phones no longer being an option. Nokia was already cutting jobs like crazy before the first Windows phone, as they were in a bad spot because of Apple and Android gobbling up the market with already maturing ecosystems.

The bias of people against companies and CEO/management seems so strong today with little to no information on how a business is even run.

 

[NoOther]

I will admit I went off the handle a bit there, yes of course it's not just a free pass. I was considering deleting what I originally wrote here, but I'll leave it so maybe you'll get a laugh out of it. It just seems there have been a lot of these kind of huge company purchases lately that never pan out, and I guess I personally just feel that due to the grand scale of money/people's jobs/resources involved, there should be a greater loss when it doesn't pan out.

Original reply:
Those at the top come out just fine, prices go up for consumers, and those 'taxes' are basically lost, however if it was a fruitful venture they would have had to pay taxes. Mistakes like this are possible because mammoth risks of this scale don't have a real risk to the top or the company as a whole, just the lower peons and of course consumers, who always lose.

But that is just it, those at the top do not "come out just fine" many get fired for their mistakes or step down, like Ballmer. I mean you can argue that they still are wealthy and have a lot of money, but that would also be true of any other profession. They got paid for the work they did, it is hard to take away money from someone that performed a service for you. Part of what keeps CEOs in check is their pay in stocks. If you hurt the company, you are hurting yourself too since the valuation will drop.

 

[zamardii12]

The biggest problem was lack of apps. They should have spent that money subsidizing the windows app store and subsidizing app developers.

I honestly legit don't understand why developers didn't and still don't invest more into the Windows Store interface. I know it makes sense that there are no mobile Windows devices really (cell phones, tablets, etc) that make up a large-enough market share but you have to think that Windows is still the most used OS in the world and is capable of running the same apps. With sooo many Windows devices being 2-in-1s, tablets, and touchscreen laptops you would think it makes sense since Microsoft had the unified OS thing which was supposed to be so that the same app that works on say a smartphone, works on Windows and Xbox as well.

You know... developers...

 

[NoOther]

I honestly legit don't understand why developers didn't and still don't invest more into the Windows Store interface. I know it makes sense that there are no mobile Windows devices really (cell phones, tablets, etc) that make up a large-enough market share but you have to think that Windows is still the most used OS in the world and is capable of running the same apps. With sooo many Windows devices being 2-in-1s, tablets, and touchscreen laptops you would think it makes sense since Microsoft had the unified OS thing which was supposed to be so that the same app that works on say a smartphone, works on Windows and Xbox as well.

You know... developers...

From experience, things that should work on multiple platforms don't always work the same or create other issues. I would suspect that part of the problem is figuring out how to differentiate apps from various devices and building in proper device detection into the app install. So far the unified OS project is still in its infancy. There are numerous issues when trying to get parts of the OS which were designed for PCs and laptops to work on more mobile specific devices, especially when you are talking about the difference between x86 based hardware and ARM based hardware. Linux is having a lot of the same issues in trying to get similar functionality out of ARM as x86. So far most of the ARM instances come with greatly reduced capabilities to their desktop counterparts.

 

[heatlesssun]

I love how these companies can just 'write off' billions in mistakes. Why is there not enormous punishment for these errors? Big moves should carry big risk and responsibility.

Microsoft has like $150 billion in cash so not exactly an enormous error relatively speaking.

 

[zamardii12]

From experience, things that should work on multiple platforms don't always work the same or create other issues. I would suspect that part of the problem is figuring out how to differentiate apps from various devices and building in proper device detection into the app install. So far the unified OS project is still in its infancy. There are numerous issues when trying to get parts of the OS which were designed for PCs and laptops to work on more mobile specific devices, especially when you are talking about the difference between x86 based hardware and ARM based hardware. Linux is having a lot of the same issues in trying to get similar functionality out of ARM as x86. So far most of the ARM instances come with greatly reduced capabilities to their desktop counterparts.

Apple seemed to pull it off pretty well between Macs, iPads, and iPhones.

 

[MV75]

So why is Satya always have, and is still pushing a very mobile centric os?

 

[Deleted member 184142]

Apple seemed to pull it off pretty well between Macs, iPads, and iPhones.

Apple controls all the HW, and it's a VERY limited set of HW and configurations compared to the almost limitless ones for Windows. Even still, you have lots of apps in the

So why is Satya always have, and is still pushing a very mobile centric os?

As the market is moving to mobile, desktop is not what it used to be, most people these days do not even consider getting one, it's laptops and tablets everywhere. We here on this forum are a very small section of the over all user base.

 

[zamardii12]

So why is Satya always have, and is still pushing a very mobile centric os?

I would have thought that's obvious at this stage. Even my laptop is a 2 in 1 and works fantastic as a tablet and a regular computer.

 

[odditory]

Windows phone was already fairly different from IOS and Android to be its own thing. What sunk it as others said, was app support.

The tiled UI didn't really sway consumers. You imagine Ellen Degeneres opening a carton of spoiled milk and sticking her nose in it and that's pretty much every consumer when passing by a windows phone in the store "W.T.F. is that"

Hell, even Bill Gates uses an Android phone. https://www.theverge.com/2017/9/26/16365424/bill-gates-android-phone-switch

Android is probably everything Winphone should have been. Open and honest. Instead, MS tried to chase the Apple model of locked down and walled in, but without the brand creds to pull it off or apps that people found useful.

 

[NoOther]

The tiled UI didn't really sway consumers. If Ellen Degeneres opening a carton of spoiled milk - that's pretty much the facial reaction most consumers had when walking by a windows phone and pausing momentarily "W.T.F. is that"

Hell, even Bill Gates uses an Android phone. https://www.theverge.com/2017/9/26/16365424/bill-gates-android-phone-switch

Android is everything windows phone should have been - the most natural extension of what people liked about windows desktop - open and honest. Instead MS chased delusions of walled in, locked down Apple grandeur.

Embarrassing.

But that is my point. Apple and Android already had something significant and app stores all ready to go. For Microsoft to do something demonstrably different, it would have taken too much time to develop. So either they enter and try to compete with what they have, and there were a number of things with Windows Phone that were unique and desirable to many people, or they took the time to develop something more substantial, in which case they would have been far too late to the party. Really they were pretty much in a no win situation.

 

[Bigbacon]

sad thing is the nokia windows phones are good phones and the OS (8+) is a perfectly fine OS. Never gives me problems unlike android but yes, the lack of any app development really killed it. they couldn't even keep the big name apps on the platform or the versions we got were terrible (like facebook)

 

[odditory]

But that is my point. Apple and Android already had something significant and app stores all ready to go. For Microsoft to do something demonstrably different, it would have taken too much time to develop. So either they enter and try to compete with what they have, and there were a number of things with Windows Phone that were unique and desirable to many people, or they took the time to develop something more substantial, in which case they would have been far too late to the party. Really they were pretty much in a no win situation.

Gotta call bullshit. Microsoft was way out in front of both Apple and Android with windows mobile, and they got smug, got complacent, Ballmer himself mocked at iPhone as something no one would buy, and they ultimately sat around with a thumb wedged and squandered all their momentum. Its very hard to feel sorry for MS.

Android also didn't have a fully fleshed out appstore from day one, neither did Apple. And MS has had more than enough time to innovate on the mobile front; they simply chose not to.

 

[NoOther]

Gotta call bullshit, sorry. Microsoft was way out in front of both Apple and Android with windows mobile, and they got smug, got complacent, Ballmer himself mocked and laughed at iPhone as something no one would buy, and they ultimately sat around with a thumb wedged up high and squandered their momentum. Its very hard to feel sorry for MS if you know the history.

First off, I never felt sorry for MS, and I don't think you are really paying attention to what I have been saying.

First, Windows made a mobile OS, but they actually weren't invested in "mobile". It is a completely different thing. That is what Nadella was speaking towards and what my comments were directed towards. When they did start investing in "mobile" and bought Nokia and came out with the Windows Phone specifically targeted for that market, there were already established giants (IOS and Android). They had some decent stuff, but they didn't have a significant app store to compete. Even if you have a nicer design, more fluid UI, more customizeable options, it doesn't matter if someone can't get all the apps they want to use. They see someone else with all these cool apps and utilities on their IOS or Android phone, that can't be obtained on the Windows phone and they are going to want to get that phone instead.

Second, my point was MS was at a tipping point, either they come out with a half baked solution, or they wait and come out with a full solution. The problem is timing. You wait too long and you completely miss the market. Nadella thought they should have waited, I disagreed that it would have made any difference had they waited.

 

[Retronym]

I love how these companies can just 'write off' billions in mistakes. Why is there not enormous punishment for these errors? Big moves should carry big risk and responsibility.

Risk is necessary in business.

 

[SticKx911]

They should have just made android phones with a skin. Maybe like Amazon did with the fire phone...yea, that failed too, But with nokia IP, they had an edge in hardware. Just bundle some software to make it more convenient to business users and maybe add choice to the market that gravitates towards ios.

 

[westrock2000]

Its a shame too, because Microsoft had the potential to do what Apple has done with the "ecosystem", only to a MUCH larger audience. They had everything. Windows, Zune, Xbox, Skype, OneDrive. Literally everything needed to complete with Apple. Except the mentality.

 

[ZergSolo]

Satya is a Maroon, Don't be like Satya !!

 

[natos]

God how i wish they had not fucked up the windows phone. I would of LOVED a 3rd real option.

Yea I agree, I don't know how they could make it into such a big mistake.......what a royal f-up...I love my windows phone, and hate the sad path it has followed since Nutella has become CEO....

 

[NoOther]

Its a shame too, because Microsoft had the potential to do what Apple has done with the "ecosystem", only to a MUCH larger audience. They had everything. Windows, Zune, Xbox, Skype, OneDrive. Literally everything needed to complete with Apple. Except the mentality.

Complacency. We see it all the time from companies that hold that much of a majority in their area. In some ways it is a good thing, so that other companies can actually compete in a new market. Otherwise it's possible that the only big player in all those areas would be Microsoft. I would actually wonder if this is the reason they don't pour so much money or effort into certain other areas, to avoid too much dominance in the market and then fall back into Monopoly territory.

 

[Pieter3dnow]

Did you actually read the article? His point was that they weren't all in on the mobile market at the time. They didn't have a solid solution with something new and they were entering into a battle with 2 established iants. That is completely different than Windows, where they are the current market leader.

He has a point, although I am not sure I totally agree with his point. Apparently neither did the rest of the leadership team. What I mostly disagree with is his idea, which would have been to develop an entirely new and different product to compete with them. I am not sure taking the time to develop something else would have been a viable strategy either. Windows phone was already fairly different from IOS and Android to be its own thing. What sunk it as others said, was app support.

Well MS management is fairly unimpressive. If they can't even hire people to think of strategy towards market entry and fail badly at the main thing applications something is very wrong.

 

[lironmiron]

God how i wish they had not fucked up the windows phone. I would of LOVED a 3rd real option.

3 options in a single market?! That's so last century!

 

[Burticus]

Buying Nokia was a brilliant move for Microsoft. If it had been 2001. Or hell, any point before the iphone.

I think they were too quick to give up and ditch it. Given time and enough billions it could have been...... oh I can't even finish that sentence.

 

[NoOther]

Well MS management is fairly unimpressive. If they can't even hire people to think of strategy towards market entry and fail badly at the main thing applications something is very wrong.

Because so many other companies have done better? That is why there are only 2 ecosystems in the market place now? I don't really see your point here. Also why should MS be that concerned when their primary mission lies in an entirely different area. Which is again part of his point here.

Let's also not forget that even as "unimpressive" as they may be, they still control the market in their prime focus, desktop and enterprise OS, and productivity software.

 

[shad0w4life]

Just fired up my 1020 yesterday to look for text messages, smooth as butter unlike this Android POS that requires 5 different applications and sacrificing a small animal to get it to read, reply and give you voice commands when receiving a text message while driving.

Gawd I hate android, but less than iOS

 

[illram]

MS always jumps on the bandwagon after someone else, and they've been successful doing that a few times (Windows, Xbox, MS Office, old IE Explorer, Encarta for a little bit) and unsuccessful many other times (Zune, new IE Explorer, Edge, Bing, Windows Store (I guess jury is still out on that) etc.) The Windows Phone seemed like a natural move at the time, just maybe a little late and not handled as well as they could have. I feel like the Surface is what they wanted to do with their Windows phone, and they just miscalculated that no one would really give much of a shit about, say, using Word on their phone or whatever. At least not enough to buy into the whole ecosystem for that. As opposed to a larger cool looking tablet that actually could be used for work if you wanted.

What they should have done from the get go was what they always do best: infiltrate and take over something else. They seem to now be moving more into Android with their apps which is great but they should have done that sooner. I think their acquisition of Skype could have been leveraged more and more aggressively pushed as an all in one data based solution for free carrier-neutral, international talk/text/chat on your phone or tablet, with similar functionality to Hangouts, Facetime or Whatsapp wherein you can tie it to your current number. That would suck people into MS while on Android. They had Outlook already, which they did not roll out to Android for way too long. They also missed the boat on developing their own mobile Android browser that current Windows users might feel comfortable with. Chrome even more than Gmail is probably the thing that has sucked me most into Google's ecosystem clutches, because anything I use has it, and it is "my browser" everywhere. Maybe had they tied people's MS or Hotmail accounts to a decent mobile browser/email/skype trifecta on Android a lot longer ago they would have more users deep in their ecosystem. As it stands I think most people have an MS account just to sign into Windows or their Xbox and maybe for their Office account.

 

[Romale23]

MS always jumps on the bandwagon after someone else, and they've been successful doing that a few times (Windows, Xbox, MS Office, old IE Explorer, Encarta for a little bit) and unsuccessful many other times (Zune, new IE Explorer, Edge, Bing, Windows Store (I guess jury is still out on that) etc.) The Windows Phone seemed like a natural move at the time, just maybe a little late and not handled as well as they could have. I feel like the Surface is what they wanted to do with their Windows phone, and they just miscalculated that no one would really give much of a shit about, say, using Word on their phone or whatever. At least not enough to buy into the whole ecosystem for that. As opposed to a larger cool looking tablet that actually could be used for work if you wanted.

What they should have done from the get go was what they always do best: infiltrate and take over something else. They seem to now be moving more into Android with their apps which is great but they should have done that sooner. I think their acquisition of Skype could have been leveraged more and more aggressively pushed as an all in one data based solution for free carrier-neutral, international talk/text/chat on your phone or tablet, with similar functionality to Hangouts, Facetime or Whatsapp wherein you can tie it to your current number. That would suck people into MS while on Android. They had Outlook already, which they did not roll out to Android for way too long. They also missed the boat on developing their own mobile Android browser that current Windows users might feel comfortable with. Chrome even more than Gmail is probably the thing that has sucked me most into Google's ecosystem clutches, because anything I use has it, and it is "my browser" everywhere. Maybe had they tied people's MS or Hotmail accounts to a decent mobile browser/email/skype trifecta on Android a lot longer ago they would have more users deep in their ecosystem. As it stands I think most people have an MS account just to sign into Windows or their Xbox and maybe for their Office account.

I think the issue was balmer could see microsoft needed to get into x y and z but he couldn't figure out what it should look like and neither could people under him.

 

[steakman1971]

I know not everyone likes Satya, but under his leadership - I think Microsoft has been making some smarter moves. I have invested in MSFT (I'm not a big time investor by any stretch) - I think the current road map for what they are doing makes more sense. So far, my little investment is up quite nicely since I bought into them.
But yeah, fuck up of the century has to be MSFT dropping the ball on the mobile market. They had Windows CE, Pocket PC, etc way before the iPhone existed. These products were the only show in town. Apple yanked the rug from them by providing a much better UI and platform. MSFT failed to innovate. Big companies can be their own worse enemies at times - few divisional VP's are willing to take a risk and you don[t mess with the cash cows of a company.

 

[Pieter3dnow]

Because so many other companies have done better? That is why there are only 2 ecosystems in the market place now? I don't really see your point here. Also why should MS be that concerned when their primary mission lies in an entirely different area. Which is again part of his point here.

Let's also not forget that even as "unimpressive" as they may be, they still control the market in their prime focus, desktop and enterprise OS, and productivity software.

And that is not because of their mad business skills .....

 

[illram]

I think the issue was balmer could see microsoft needed to get into x y and z but he couldn't figure out what it should look like and neither could people under him.

Yeah it's too bad. Google has so badly mishandled their messaging efforts and for a long time that MS had an opening there, for instance, if they went hard into Android out of the gate. Hangouts? Allo? GChat? Messenger? Google Voice? Who knows what to use! Google certainly doesn't. There really was a window (maybe still is?) on Android for MS to jump in and offer something easy and unifying. They're certainly big enough to offer a competitor. I think more and more people want their phone number to port over to other devices; tablets, computers, secondary phones, etc. I can do that now, but it still could be simpler and I'm never sure if Google is one day just going to trash what I am using and turn it into three more products and make me use all three instead of one.

MS has the market power to do that and products--Skype, namely--to do it with. I feel like they could jump on that but instead they want you to get a Skype number and buy minutes and yada yada. Lame.

 

[MV75]

I would have thought that's obvious at this stage. Even my laptop is a 2 in 1 and works fantastic as a tablet and a regular computer.

Yes, fundamentally a laptop is still used as a desktop. I too have an asus transformer, works great with win8.1 on the desktop interface.