Microsoft and Nokia – Hugging Each Other For Warmth?

microsoft-nokia-deaMy first reaction to the Microsoft-Nokia announcement: This very much feels like two organisations hugging each other to stay warm against the cold winds of reality.

Both have lost their way from positions of incredible market dominance a decade ago, and it looks like each is turning to the other for rescue.  Yet they’ve had a partnership for some time, and it hasn’t made the necessary waves. So why does anybody think it might work now?

What is Microsoft buying? Nokia has already fought Apple, and lost. Windows is not breaking through as a phone OS. Why not either admit defeat, and switch to Android as a phone OS, or be really radical, and find some up and coming disruptor, with a new phone OS, where your dollars and scale will help them break in?

Where is Nokia now? The new CEO is being positioned as the new Microsoft CEO, but boy does he have his work cut out. He appears to have failed to spot the market transition from handset distribution to app ecosystem whilst at Nokia, and now he is set to inherit an almighty mess at Microsoft.

The whole thing smells of the kind of thinking that you get in a global corporate boardroom; out of touch with reality and focusing effort in all the wrong places. Nobody at Microsoft or Nokia seems to see that two failing organisations merging is just going to create one great big failing organisation.

I hope there’s more to it that this. There has to be.

Update: The excellent Ben Thompson has written this analysis of the deal. I think he may well have nailed it.