Post by Fraser Mayfield |
As I’m sure you’ve seen, on September 3rd 2013 Microsoft confirmed that it is to buy Nokia’s mobile phone business and license its patents. The all cash €5.4bn deal is massive - 32,000 Nokia employees will transfer to Microsoft, of whom 4,700 will be in Finland. Microsoft also committed to building a new data centre in Finland to service its customers.
The scale of the deal reshapes the telecoms industry on two continents and confirms Microsoft’s commitment to becoming a major player in mobile devices. According to Steve Ballmer, Microsoft’s outgoing Chief Executive, “We know we are number three in the market, we’re not number two or one and we need to accelerate.”
Microsoft first partnered with Nokia in 2011 and the relationship has delivered good results. According to Kanta Worldpanel ComTech sales data for the three months to July 2013 “shows Windows Phone has posted its highest ever level of 8.3% across the five major European Markets, emerging as a key player in the smartphone race.”
In addition, in the presentation that accompanied the launch, Microsoft claimed to have more than 10% market share in 9 markets, to be outselling Blackberry in 34 and to have 78% year-on-year growth.
Microsoft are clearly hoping that the deal with Nokia will deliver even greater success. In a memo sent to Microsoft employees Ballmer stated: “Now is the time to build on this momentum and accelerate our share and profits in phones. Clearly, greater success with phones will strengthen the overall opportunity for us and our partners to deliver on our strategy to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.”
Advantages for business
So what does this acquisition, and Microsoft’s commitment to growing its mobile share, mean for business in general and law firms in particular?
Firstly, the Nokia/Windows deal now ensures a viable alternative ecosystem, with a healthy future, to compete with Apple/iOS and Google/Android.
Secondly, the Microsoft platform, which is already the de facto standard in many firms, can be employed from the data centre to the end device. Dealing with a single platform simplifies maintenance and support.
Thirdly, Microsoft are clearly committed to providing a first-rate phone experience for users, accelerating innovation and delivering new, high level services on the Windows Phone platform.
Finally, Microsoft are intent on extending their business applications out to mobile devices, enabling employees to work anywhere and, as a result, become more productive and effective. Only recently Microsoft announced three new companion apps – Approvals, Timesheets and Expenses – for Microsoft Dynamics AX 2012 R2, the system that underpins Project Nimbus.
Of course, Microsoft is also committed to providing business apps on the iOS and Android operating systems. Firstly by making available the new companion apps for Microsoft Dynamics AX 2012 R2 available on those platforms. In addition, on the same day the Nokia deal was announced Microsoft launched an Android version of Office. Nevertheless, the Nokia deal gives customers more flexibility and choice.
With the announcement of the Nokia deal still fresh there are still unanswered questions. For example, how will other phone manufacturers using Windows Phone react to the fact that Microsoft is now a competitor in handsets as well as a software supplier? No doubt we will see over time.
However, for users of Microsoft business management software, the acquisition is good news as it shows a firm commitment by Microsoft to mobilise all its platforms and enable a work everywhere approach.