A new Nokia: Stephen Elop's plans for Microsoft
In front of 5,000 software developers in San Francisco last week, Microsoft laid out its stall for a new future where mobile phones are key.
Little matter that the company has missed the boat since former chief executive Steve Ballmer laughed at the iPhone – today, finally, it knows that the mobile phone is the only frontier that really matters.
Stephen Elop will be the company’s new commander in this crucial battle. The former boss of Nokia will run Microsoft’s devices and services division, moving from chief executive to a new, much larger role when Microsoft completes its acquisition of the struggling Finnish manufacturer.
His aim will be to turn what’s already the fastest growing mobile platform into a serious challenger to Apple and Google, and he says that he’s quite happy to be ruthless.
Take, for example, the recent step of putting Microsoft Office onto Apple’s iPad: “We establish that to the benefit of Microsoft when you’re using Office on the iPad you might just get drawn into Skype.
“In some ways, it’s taking a valuable asset of Microsoft and being – it’s sort of an odd word – parasitic on the iPad. We are communicating with consumers on iPads to get them into Microsoft.”
This Windows-maker is not just a parasite on Apple, however. Nokia has made a phone using Google’s Android operating system. While Microsoft’s Windows Phone software boss, Joe Belfiore, described it as a move he didn’t like, Elop is robust: “We’re not going to take Windows and run it on a €15 device, yet.
“Microsoft has so many assets – if you’ve asked the head of the Skype team he could have said that there could be 100m new consumers amongst people that Microsoft has never talked to who all of a sudden create a Microsoft account [thanks to a cheaper Android device].From a broader perspective – a more complete view of the company – it can be a very powerful opportunity.”
While Belfiore is less enthusiastic, he concedes that the Microsoft-Android hybrid model is “an experiment that deserves watching”. Nonetheless, Belfiore says: “My strategy is to make Windows Phone successful. You hear me talking about having great price points – we are going to go after that.”
The impression is that Belfiore views the Nokia X Android project as a short-lived experiment that may provide interesting data. “I don’t know how that’s going to go yet,” he said. “It’s nice that they connect to services like OneDrive, all that’s good. We can learn which aspects of it matter.” When Microsoft completes its acquisition of Nokia, he says, “we’ll go dig through all the facts.” According to Elop, the prospect of properly integrating the software of Microsoft and the hardware of Nokia might provide a host of similar opportunities.
He says that the cheaper parts of the phone market may get compressed as devices become cheaper, but “in the context of Microsoft [Nokia] has a broader mission which also includes making the market or paving the way for other manufacturers”. Elop added: “Any technology needs someone to lead it. New experiments, new innovations, someone’s got to put the seed capital down.
“Microsoft, combined with Nokia, will make more of those seed investments. The best thing that can happen is that other manufacturers step in.” The impression he gives, overall, is of relentless enthusiasm for Microsoft’s products, with Nokia acting as their best ambassador. “Certainly there will be efforts made to make sure that other manufacturers have full access to Microsoft,” he said. “But it is our intent by coming into Microsoft to reduce the friction between what we’ve done at Nokia and what’s going on at Microsoft.”
He says that those moves could have improved key functions, such as the camera, and says there are marketing advantages too.
“Today, before the deal closes, we still have the ‘Nokia Lumia 1520 using Windows Phone 8.1 on the AT&T fastest in the land network’,” Elop says.
“That’s the name because everyone’s got to get their piece in. We can simplify some of that. I guarantee you it will be fewer words and probably a few less numbers.”
All of this goes to the heart of the bureaucracy that has hampered Microsoft in the past. Where previous business units have often been rivals with their peers, he presents a version of a more open company that is in tune with a single mission. “Listen to Satya [Nadella] as he’s taken over as CEO and recognise that at moments like this you have to take stock of how does the company move forward as a whole,” says Elop.
Even the company’s new voice assistant, dubbed Cortana, is unusual for being open to developers to use in their own apps from the beginning.So it’s the idea of mobile technology as a whole that Elop says is key. But it doesn’t end at phones, even if cracking that nut will be huge progress. “Mobility is defined by a lot of things,” he teases. “Wearables, that’s part of it. Automobiles.”