Stephen Elop Would Kill Bing, Sell Xbox if CEO of Microsoft
Recently sources claimed that Microsoft's board has a three-person list of internal candidates to replace Steve Ballmer as the company Chief Executive Officer, consisting of Chief Operating Officer Kevin Turner, business development and evangelism chief Tony Bates, and cloud and enterprise business chief Satya Nadella. Before narrowing the internal list, the board also spoke to Bing and Office chief Qi Lu and operating systems boss Terry Myerson.
As for outside candidates, the board is currently interviewing Ford Motor Co. CEO Alan Mulally and former Nokia Oyj CEO Stephen, who resigned as Nokia's CEO when the $7.2 billion sale of its devices and services business was announced months ago. Elop will supposedly become head of a new Microsoft devices unit that controls the Surface tablets and Xbox gaming consoles.
However sources claim that Elop believes Microsoft could create more value by maximizing the sales of Office rather than use the software to sell Windows-based devices. Even more, to sharpen the company's focus, as CEO he would actually sell off or shut down major businesses such as Bing, which has been a costly effort to take on Google's own search engine. The Xbox business could also be sold off if deemed not critical to the company's strategy.
Investors drove Microsoft shares to their highest price since mid-2000 earlier this week, thanks to a comment made by Nomura Holdings Inc. analyst Rick Sherlund. He said that fiscal 2015 earnings could be lifted by 40 percent if the company sold off its Bing and Xbox units. “Microsoft is trying to do too much, and these assets add no clear value to the overall business,” wrote Sherlund. He also predicts that Ford's Mulally will likely fill Ballmer's shoes.
Sources point out that while at Nokia, Elop cut 40,000 jobs and reduced operating expenses by 50 percent. There's a good chance Elop will impose job cuts and "belt-tightening" as well to create even smaller teams at Microsoft. He will also likely focus on what a customer can do with a device rather than the underlying operating system. As an example, he dumped Symbian because it wasn't gaining any ground on iOS and Android, and went with Windows Phone, believing Microsoft's OS would be a fast track to success.
Another clue to Elop's thinking, according to sources, stems from the way he handled Nokia's mapping and location-tracking software. Instead of making the service proprietary to Nokia phones, he turned it into a standalone software business called "Here". Amazon is the latest customer to use Nokia's mapping service in several of its products.
Bloomberg points out that in his earlier days at Microsoft as a senior executive, Elop cut a deal to offer Office on Nokia's Symbian phone software. Then in 2010, the company added free, scaled-down versions of Word, PowerPoint and so on that anyone could access via the Internet. Elop also reportedly oversaw the development of Office 365, a hosted version of the popular suite that requires an annual subscription instead of a software purchase.
He doomed Nokia by refusing to go Android, then sold it to Microsoft for pennies on the dollar.
Now he thinks selling Office is going to be Microsoft's saving grace? The market is transitioning to free, cloud based alternatives. Thinking you can build a company around selling Office is a joke. Microsoft is going to have to sell devices and the only way that's happening is to include Office free. Without that, the reasons to buy any Windows product in the consumer market starts to dry up. Services are fine, but the vast majority of MS money comes from OS licenses and in order to sell those you need to sell devices.
Not sure MS is at a point yet where MS has to cut their losses and downsize.
He doomed Nokia by refusing to go Android, then sold it to Microsoft for pennies on the dollar.
Now he thinks selling Office is going to be Microsoft's saving grace? The market is transitioning to free, cloud based alternatives. Thinking you can build a company around selling Office is a joke. Microsoft is going to have to sell devices and the only way that's happening is to include Office free. Without that, the reasons to buy any Windows product in the consumer market starts to dry up. Services are fine, but the vast majority of MS money comes from OS licenses and in order to sell those you need to sell devices.
Why do company's facing any difficulty always grab new CEO's from the suits club? Career executives do not have the insight to make company's become huge successes. It takes someone with the entrepreneurial spirit to do so. Rockefeller, Jobs, Gates, Carnegie, Ford, &c are the guys that start with basically nothing and create empires.
This is what Microsoft needs. Someone with vision, who is willing to take risks. The managerial types that embed themselves and move from company to company as high rank executives do not have this. All they know is to cut costs and improve efficiency to boost next quarters profits for the best bonus possible at all costs to the welfare of the company. Their motto is to hold the course, stay with what is safe, design by committee, use focus groups and market the hell out of crap products in hopes of fooling enough people.
Both of these divisions are indeed losing money, but Bing seems like it would be an awful big asset in the transition to cloud based services if Google is any model.
xbox is a different animal altogether. I'm not sure what it accomplishes for Microsoft. It's currently losing them about 2 billion a year. My assumption is they think xbox live subscriptions will create a lasting revenue stream after the initial loss on console sales. Since this didn't work in the past though, my guess is that they are hoping a lot of people run their cable through the xbox so they can collect user data to be sold. Perhaps losses on current gen hardware aren't as heavy as on the 360 so they concept could work.
Not sure MS is at a point yet where MS has to cut their losses and downsize.
I can understand Bing. While I think its a decent search engine, it did implement some nice features that Google added afterwards, its not going to be easy to grab marketshare because Google has the name that everyone knows.
But Xbox is a very big business for MS. It brings in plenty of money and the XBOne looks pretty decent overall as a replacement for most HTPCs so killing that would be pretty stupid.
Then again he could sell it to Sega then maybe we can relive the mdi 80's to mid 90's console wars. NintenDON'T. Hah, memories.
Not sure I trust the guy since its said he gutted Nokia and then paved the path for them to be bought by MS. I just hope he doesn't kill MS.
this guys does not need his hands on MS.
you know, after years of philanthropy, Bill would probably say: 'windows and office? They're awesome you know, and just to prove it to ya I'm gonna give it to everyone for free, cuz I'm a nice guy like that'
not that it's a bad business model :-P
I don't see where bing has made people miserable .. it has lost MS money though but are you high one the xbox separate ecosystem thing ??? the xbox only ahs a 25-320 gig HDD at most the xbox one will only have 500 gigs with windows 8 I can offload my movies I buy on xbox to my PC where I have a 2 TB HDD. the xbox ecosystem being cross platform is a god send for people that actually have both . and well if you don't have xbox you can still easily browse and buy movies on your PC. its about having options .. close those ecosystems as separate entities and you loose those nice potions like this. 10-15 HD movies would quickly fill up my 250 gig Xbox HDD. where they only make a slight dent on my PC's 2 tb HDD.