Curing Microsoft’s Ballmer Hangover

Microsoft pulled the plug on its Nokia acquisition last week, announcing a $7.6 billion write off on the mobile phone unit and a round of 7,800 layoffs. That’s nearly 7 percent of Microsoft’s global workforce. This is not a mere retreat, but a full surrender.

Unfortunately, this all falls on current CEO Satya Nadella, who is suffering from a serious case of Ballmer hang over. The Nokia deal was former CEO Steve Ballmer’s last-ditch effort to keep his job. And like all his other mobile phone strategies, it has failed miserably and in this case leaves Nadella holding the bag.

In our 2011 Tech Predictions, Nucleus Research called for Ballmer to go due to his lack of vision and inability to execute. Sadly Microsoft didn’t come to that same conclusion until 2014. You have to wonder if Microsoft could have found a successful path for Windows Phone over those three years with a better leader.

While Nadella has faced his own setbacks and hiccups since taking the helm, he has recently impressed with his willingness to follow through on tough decisions. Writing off Nokia is one of them. He’s starting to show a sharper focus for Microsoft and giving hints to future directions.

He’ll need to further sharpen that focus and make more tough calls going forward. With the end of the Nokia experiment, Windows Phone is now on death row. Already under three percent market share worldwide before Nokia’s demise, Windows Phone has no clear path to excite the market and grow. It’s withering on the vine.

And yet Microsoft continues to pay lip service, stating that Windows Phone will now focus on value customers, business users and diehard Windows fans. Let’s break this down. ‘Value customers’ means bargain basement, aka no margin. Should we expect a discount deal with Walmart? Business users show no sign of preferring a Windows Phone over Android or iOS devices and as for Windows fans, I’m guessing Microsoft is referring to the less than three percent of the market who actually bought a Windows Phone.

Let’s face it Nadella, with the end of Nokia comes the death of Windows Phone. Sobering up from the Ballmer hang over has been painful, I’m sure. Don’t be tempted to go back and drink more of the spiked Kool-Aid. Put Windows Phone out of its misery already. Time to push Ballmer to the past, reinvent Microsoft and let the Nadella era begin.