Microsoft and Nokia: An enterprise tablet might be their best hope

Find out what Patrick Gray thinks about the marriage of Microsoft and Nokia on the tablet front.


Microsoft has made front page news for the last few weeks, first with the announcement that CEO Steve Ballmer would retire once a replacement was found, and then with the announcement that Microsoft was buying Nokia’s devices business. Neither item was completely unexpected. Despite years of solid revenue and an enviable profit margin, Microsoft under Mr. Ballmer had few major new products. The Nokia purchase had been rumored for several months and also is the culmination of an increasingly close partnership between the two companies. Like Microsoft, Nokia has been regarded as an early innovator that lost its way. So, what does this marriage between two tech titans that many regard as "past their prime" mean for the enterprise?

Microsoft, hardware giant?

The obvious outcome of the acquisition is that Microsoft now becomes a full-fledged hardware company. Past in-house hardware has been presented as “one-off” products, with Microsoft assuring hardware partners that it would avoid cannibalizing their sales. With Nokia, this “gentlemen’s agreement” will likely come to an end, at least with smartphones and tablets.

One of the major complaints with Windows Phone and Windows 8 on tablets, and really any new release of Windows, is that the software and the device don’t integrate well. By buying Nokia’s hardware capabilities, Microsoft hopes to steal a page from the Apple playbook and bring hardware and software under one tightly integrated roof. This is a laudable goal, especially since Microsoft formerly straddled an awkward fence between Google, where its Android OS is readily and easily modifiable by any and all hardware providers, and Apple, with its tightly integrated (and fully closed) OS and hardware.

The other obvious benefit to purchasing Nokia is that Microsoft’s mobile offerings have largely failed to meet their sales targets, a fact that has not gone unnoticed by Microsoft’s hardware partners. With sagging desktop and laptop sales, tablets are a key component of all the hardware players’ growth strategies. Major hardware partners have quietly abandoned plans to release new tablets based on Windows RT, and in many cases are turning to Android for their tablet offerings. Despite well-designed hardware, Microsoft’s own Surface line of tablets has failed to achieve commercial success and still struggles with areas like battery life where Nokia may be able to help.

Waiting for Windows

On the enterprise tablet front, the obvious benefit we’ll see from this match is a new series of Windows tablets. It’s a safe bet that such a device was already in the works, and the only question is how quickly the combined company will be able to implement the benefits of a tighter integration between hardware and software. If it wants to succeed, Microsoft needs a comprehensive and cohesive line of tablets. At the entry level, a successor to the Surface that offers a more familiar tablet format vs. its current laptop-like screen, while retaining the high quality hardware, snap-on keyboard, and battery life would be a good start, assuming low pricing is maintained. At the upper end, a tablet running Windows 8 in a similar form factor with well-executed pen input might make enterprise inroads.

The major problem is that consumers and enterprises are losing patience waiting for Microsoft to get its act together on the mobile front, and I have yet to hear anyone quip that Microsoft’s biggest problem with mobile is insufficient hardware. On the consumer front, the availability of Office on a tablet has failed to set the world on fire, even with the aggressive pricing of the Surface RT. With enterprises,  longstanding Microsoft shops have begun to standardize on Android and iOS for mobile and are largely ignoring Windows Phone and Windows 8. Both problems stem from software more than hardware. Furthermore, despite the lofty talk around every merger and acquisition, they are messy processes and distract both companies from their core business, as everything from product development to HR are reworked and employee uncertainty becomes the modus operandi.

I don’t see Microsoft’s tablet offerings making much headway in the consumer space in the next year, leaving the enterprise -- where a cheap, lightweight mobile device that runs Office is compelling -- as their best hope. Microsoft will need to overcome the growing negative perceptions around Windows 8 and also clear the muddied waters around Windows RT. It must do all this while integrating a large and relatively quirky hardware company into a technology behemoth that’s lost its innovation chops. Not to mention a major reorg that amounts to the final hand grenade tossed into the fray by the departing CEO.

Microsoft has won major technology battles before, obliterating Netscape in the browser wars and dethroning Sony on the gaming front, but mobile may be a battle the company can’t win with its current Windows/Office-centric strategy. Do you agree? Share your opinion in the discussion thread below.


Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...


The only thing lacking with the MS entries into the mobile markets, is the perception of "coolness", and a heavy doze of hyperbole, which is the only area that Apple excels at.  None of Apple's devices, smartphone or tablets, can be called superior to what MS and Nokia have put out in the last year or so.  And in fact, neither can any device in the Android front be considered superior or even the equal to what MS and Nokia have put out.  

Apple and Android are in the lead for just one reason: they were out first with the current smartphones and tablets "redefinitions".  If the MS offerings had come out at the same time as Apple's iPads and iPhone, there's no doubt that Apple would still be the company it was in the late 1990s and early 2000s, and Android would just have been another failure of the "this is the year of Linux" mantra.  But, reality is that, iPhones and iPads are entrenched, as well as Android devices, but, with persistence and good and superior hardware and software, it shouldn't be too hard for MS to displace iPads and iPhones and Android devices.  MS has done it before, and they could easily do it again.  Palm and Blackberry/RIM are great examples for demonstrating that, nobody should feel secure in their current leads and positions.

Microsoft's Surface Pro 2 offering, with the optional dock, already makes a suitable enterprise play. I would not want to see the Nokia acquistition resulting to competing/overlapped products. Allow Nokia to concentrate on smartphones and 8" Windows RT tablets.


Hmm. I actually like the Nokia devices running Windows Phone 8. I do agree that Microsoft has some challenges ahead of it. 

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