| In Blockbuster Deal, Microsoft to Buy Nokia |  By Paul Thurrott | In a deal valued at over $7 billion, Microsoft will purchase Nokia's Devices & Services business, license Nokia's patents, and license and use Nokia's mapping services. But given the recent turmoil in Microsoft's boardroom, the most interesting part of this transaction is the return of Stephen Elop: The former Nokia CEO will become Nokia Executive Vice President of Devices & Services at Microsoft.
"Building on our successful partnership, we can now bring together the best of Microsoft's software engineering with the best of Nokia's product engineering, award-winning design, and global sales, marketing, and manufacturing," Mr. Elop said in a prepared statement. "With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products." | | ADVERTISEMENT |  Follow us on Twitter! Don't miss real-time updates on articles, virtual events, white papers, Essential Guides, webcasts, and more. Meet your peers and tell us what you think. Also look for us on Facebook and LinkedIn.
| | | "It's a win-win for employees, shareholders, and consumers of both companies," outgoing Microsoft CEO Steve Ballmer added. "Bringing these great teams together will accelerate Microsoft's share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services."
The deal follows a broad partnership that was announced in February 2011 after Mr. Elop, who formerly led Microsoft's Office business, assumed the CEO role at Nokia and then decided to back Windows Phone. Microsoft and Nokia had discussed a purchase in the past and almost came to an agreement earlier this summer before talks broke down. But perhaps the drama of Mr. Ballmer's pending exit eliminated some concerns. For Nokia, the sale of its most important business will bring a key influx of cash after years of losses and will result in a much smaller company. Nokia Chairman Risto Siilasmaa will become Nokia's interim CEO and noted that the firm would continue making mobile phone products, as well as networking, mapping & location, and other mobile products and services. Although it's currently unclear exactly how this will all break down, here are a few details of the transaction. Nokia will transfer its Lumia and Asha brands to Microsoft but will retain usage of the Nokia mark. So future Lumia (and Asha) phones will be Microsoft products, not Nokia products. Microsoft says it will continue to license Windows Phone OS to partners like HTC, Huawei, and Samsung. One-time CEO wannabe Julie Larson-Green will temporarily continue running the Devices & Services team but will later join Mr. Elop as part of his team; that looks like a big demotion. Terry Myerson will continue to run Microsoft's operating system team. The Nokia teams will "stay largely in place, geographically," Microsoft says. But the firms will work to integrate the various services that both companies offer into a more cohesive offering. This is an evolving story: More soon. | | Comment on this article... | | Microsoft Grants Activist Investor a Seat on Its Board | | By Paul Thurrott | In a stunning move, Microsoft this past weekend came to a "cooperation agreement" with the activist investors at ValueAct, agreed to place the firm's president on the Microsoft board of directors in 2014, and will meet regularly with him in the interim. Neither side is saying, but it appears that ValueAct's recent purchases of Microsoft stock might also have played a role in CEO Steve Ballmer's departure from Microsoft. But this strange partnership augurs a potential change in strategy at the software behemoth regardless.
"[Microsoft] has agreed ... to appoint [ValueAct President G. Mason] Morfit to the Company's Board of Directors," a filing with the US Securities and Exchange Commission reads, noting that this appointment will occur by mid-2014. "Effective immediately, the Agreement provides for regular meetings between Mr. Morfit and selected Company directors and management to discuss a range of significant business issues." As noted in the filing, Microsoft reached this bizarre agreement to avert a proxy battle by the activist investors at ValueAct. The latter firm has been buying up Microsoft stock this year and now owns a bit under 1 percent of all Microsoft stock. ValueAct buys stock in this fashion for one reason: to force the firm to follow a strategy that is accountable to shareholders and follow only those product strategies that make the most sense. Looked at through the Microsoft lens, it's pretty clear what the goal is: to thoroughly evaluate the many often-unprofitable businesses that Microsoft has sunk billions of dollars into and help forge a better strategy going forward. Theories abound that ValueAct played a role in Ballmer's exit, although he denies that. But it's not hard to pinpoint the failures—Bing, Xbox, online advertising, and Surface, in descending order of absolute money lost—and wonder whether they're now on the chopping block. Selling or splitting off a business like Xbox, for example, could result in a windfall for shareholders and free Microsoft from a financial albatross. ValueAct's sudden spearhead into Microsoft's boardroom doesn't mean that the software company will suddenly drop its "devices and services" mantra, though it's notable that its biggest money losers all fall within those two categories. In fact, the firm might simply push Microsoft to release more money to shareholders in ways unrelated to technology strategy. But ValueAct typically takes a long-term view with the firms in which it gets involved. And Microsoft's long-term successes are currently tied to controversial new businesses. "Our board and management team are committed to enhancing growth and value for Microsoft shareholders, and we look forward to ValueAct Capital's input," a statement attributed to Mr. Ballmer reads. And if that doesn't sound like a capitulation, then you're not a student of history. This once-belligerent destroyer of markets is so internally wounded that it has bowed before an invader that owns about .8 percent—point 8, not 8 percent—of its stock. Incredible. |
| | Comment on this article... | | Microsoft, Google Push Forward with Lawsuit Against US Government | | By Paul Thurrott | Microsoft and Google—otherwise the unlikeliest of allies—announced on Friday that they would push forward with lawsuits they originally filed against the US government in June. The firms believe that the government's behavior with regards to Foreign Intelligence Surveillance Act (FISA) requirements are both illegal and unconstitutional. The move comes after the breakdown of settlement talks with the US Department of Justice.
"We benefit from living in a country with a Constitution that guarantees the fundamental freedom to engage in free expression unless silence is required by a narrowly tailored, compelling Government interest," Microsoft General Counsel Brad Smith writes in a post to the Microsoft On The Issues blog. "We believe there remains a path forward that will share more information with the public while protecting national security. Our hope is that the courts and Congress will ensure that our Constitutional safeguards prevail."
Microsoft and Google filed the lawsuits over two months ago and have been negotiating with the DOJ for less stringent restrictions on their respective abilities to report to the public when the government presents them with FISA requests. "We believe we have a clear right under the US Constitution to share more information with the public," Smith explains. "The purpose of our litigation is to uphold this right so that we can disclose additional data." Mr. Smith says that Microsoft and Google met with DOJ representatives six times after filing its lawsuit and that it repeatedly agreed to government requests to extend its deadline for responding to the suits. And while the firms hoped that the talks would lead to a settlement, they did not. "These negotiations ended in failure," Smith notes. So, although the government has revealed that it will now publish general FISA request information once a year, Microsoft and Google don't feel that goes far enough. "We believe it is vital to publish information that clearly shows the number of national security demands for user content, such as the text of an email," Smith explains. "These figures should be published in a form that is distinct from the number of demands that capture only metadata such as the subscriber information associated with a particular email address. We believe it's possible to publish these figures in a manner that avoids putting security at risk. And unless this type of information is made public, any discussion of government practices and service provider obligations will remain incomplete." As a result, Microsoft and Google are pushing forward with litigation and hope that the court will uphold their constitutional and legal rights. Comment on this article...
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| Latest Blog Posts | There are Now Over 110 Million Windows 8 Users
Confounding past usage share reports and general perceptions, Microsoft's supposedly beleaguered Windows 8 did the unexpected in August, logging its biggest ever month-over-month usage jump. Windows 8 is now responsible for almost 8 percent of all active PC use worldwide, according to NetMarketShare. And that means there are over 110 million people using Windows 8 right now.
Report: Windows Phone Usage Surges in Europe, Mexico
At some point, the anecdotal reports become regional success stories and then those become just a general heads-up that, hey, maybe things are changing for the better. And that's how I view this week's report that Windows Phone has surged to 8.2 percent of all smart phone sales in Europe, and 11.6 percent in Mexico, in the most recent quarter. Its official folks: Windows Phone isn't just the third smart phone platform by default. It's surging.
Games with Gold: September 2013
As you may recall, Microsoft promised at this year's E3 conference that it would be giving Xbox Live Gold subscribers two free Xbox 360 games each month through the launch of the Xbox One in November. And since its September 1st, a new round of game giveaways is beginning.
Thinking About Surface 2
With Microsoft making its promotional price cuts for Surface RT and Surface Pro permanent, many are asking me whether now is the time to buy. The answer of course, is no. The more pertinent question is whether a coming second generation of Surface devices, which we will refer to as Surface 2, will change this equation at all. Now, that is a good question.
Windows 8.1 Book: Thinking About the TOC
While I've actually started writing the first chapter of the next book, which we'll call Windows 8.1 Book for now, the general structure of the book is a bit up in the air. Rafael and I have spoken a bit about this, but in the interests of transparency I wanted to toss out a few ideas and see what you think as well.
Complete Guide to Windows Phone 8 GDR2
While I've been writing about individual Windows Phone 8 GDR2 features for the past week or so, this article will serve as a central repository for that information, with links to everything I've written and a wrap-up of the few remaining changes I've not yet covered. Here's everything you need to know about Windows Phone GDR2.
Nokia Explains the Amber Rollout
Nokia this week answered some key questions about the rolling release schedule for "Amber," a major update for its Windows Phone 8-based Lumia handsets that is a companion of sorts to Microsoft's GDR2 update. All Lumia users should have Amber by the end of September, the firm noted, though the capabilities you'll see will vary from phone to phone.
Nokia HERE Coming to Automobiles
Nokia announced this week that it is bringing the HERE mapping and navigation services to automobiles in the coming months. The firm revealed a new in-dash navigation system called HERE Auto that will be bolstered by new and improved services and a HERE companion app for both Windows Phone and Android. | | Additional Resources | Dell Data Protection Point of View
Businesses today are experiencing a lot of growth with data volumes increasing from 40 to 60 percent a year and need to leverage this data to improve customer experience and reduce risks. Learn about Dell's Protection Point of View in this white paper where you will also discover their broad portfolio of data protection products and solutions.
Free SQL Server Backup Tool
Find out more about the capabilities and system requirements of this free SQL check tool. | |
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| Resources | Systems Management 2.0: How to Gain Control of Unruly & Distributed Networks
You might think that your network is impossible to manage…but we've seen worse. Join us for this free live seminar where you'll learn how to overcome management challenges and keep your network in control. Register now for this September 12th seminar.
Attack of the BLOB(s)!
No, this is not a sequel to the classic science fiction film "The Blob"…. Join us, September 18th at 12pm ET, for this free web seminar to De-Mystify SharePoint Data Protection and Optimization: Backup, Restore, RTOs, RPOs and... BLOBs. | | MORE RESOURCES |
| Events | Managing A Hybrid Virtualization Environment
The countdown is on! Join us Sept. 12 for or next virtual event, "Managing A Hybrid Virtualization Environment." You'll network with industry experts and peers as you brush up on best practices and techniques. Get in-depth knowledge on the latest industry news and technology without having to leave the office! Reserve your seat while there's still time.
Think you know "the cloud?"
Vendors and the media often refer to the cloud as a single entity.... in reality there are many different types of cloud solutions. Join us for this free webcast - you'll learn about different types of cloud solutions that your organization might be able to take advantage of, such as public, private, SaaS, IaaS and more! September 25th - Register Now. | | MORE EVENTS | |
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