A Timely Revision of Elop's "Burning Platform" Memo

Nerval's Lobster writes "Microsoft's purchase of Finnish phone-maker Nokia will enrich the latter's CEO, Stephen Elop, to the tune of roughly $25.4 million. That's a generous number, considering Nokia's much-publicized travails over the past few years — generous enough, certainly, to prod angry reactions from the Finnish media. As Elop came aboard Nokia in 2011, he wrote the infamous 'burning platform' memo, in which he suggested that radical moves would be necessary to halt the company's market-share declines. In light of these latest revelations, however, I offer an updated version of Elop's memo: ''

Comments

It shoud have suprised no one

[geekoid]

everyone know this was his goal from the beginning. You don't become CEO, and make a statement like that without the intention of selling.

Re: It shoud have suprised no one

[Anonymous Coward]

Looks like what microsoft did to a number of other companies in the 90s, like SGI for instance.

Cripple your competition to get a leg up.

Seriously how anyone would be stupid enough to hire a microsoft manager for ANY critical strategic position in their company after the past two decades of activities show that most companies aren't paying attention to history and thus dooming themselves to repeat it.

Re:It shoud have suprised no one

[roc97007]

everyone know this was his goal from the beginning. You don't become CEO, and make a statement like that without the intention of selling.

I would submit that it didn't surprise *anyone*. The people who insisted that this outcome was not planned from the start are the same people who benefit from the results. (In other words, they were lying. Everyone knows it, so they don't have to feign surprise.) The people who were hoping against hope that this was not the case, really had to know in their heart of hearts that this was the intended end game. And the rest of us could see this coming from 4100 miles away.

This should be yet another lesson to companies across the planet. Your CEO may not be working for you. If what any executive says doesn't make sense, INVESTIGATE. Don't just take their word for it. Their goals may be entirely different from the company's goals.

Re: It shoud have suprised no one

[Znork]

Maemo could easily have been adapted to run android apps as well and the capability was even commercially available before Elop took over. An android track at Nokia could have had a decent chance competing with Samsung. Having an OS that there are actually people who want would have put Nokia at least in a better position.

Considering Nokia was selling 10 times as many phones as Apple in 2010 they certainly were utterly crushing iphones.

So, Nokia certainly had a future and Elop certainly ran one of the greatest destructions of value in history. Hopefully he'll go on doing the same and finish what Ballmer's started at Microsoft.

Re:It shoud have suprised no one

[NatasRevol]

Also, ask these guys why they sold out.

http://www.nokia.com/global/about-nokia/governance/board/board-of-directors/

Re: It shoud have suprised no one

[Anonymous Coward]

Meego wasn't even released back in 2010. It was released in 2011, AFTER everybody knew that it had no future, Nokia made all they could to stop people from knowing about it, and still the only Meego phone (the N9) sold better than the Lumia 800 (which was exactly the same phone, but with Windows Phone 7).

Re: It shoud have suprised no one

[chuckinator]

Funny that Motorola did the exact same thing except with Android instead of Windows Mobile and had resounding success.

Re: It shoud have suprised no one

[Anonymous Coward]

Huh? The problem is, he killed Symbian at a time when is was still highly profitable and had increasing sales (but not market share). Don't spread the myth that Nokia was already failing when he took over. This is not true and the numbers speak a clear language. And yes, the had a replacement for Symbian already working: Meego. Switching to windows phone - a system already failing on the market - was the least sensible thing to do. And guys, please don't rate things insightful just because it sounds sensible. Actual numbers cleary disagree. Nokia smartohone sales:
http://www.asymco.com/2013/04/18/lumia-is-the-light-visible/

Quartely earnings reports:
http://www.nokia.com/global/about-nokia/investors/financials/reports/results---reports/

Re: It shoud have suprised no one

[steelfood]

Everybody here wasn't interested in Symbian. Everybody knew at the time it was a dead end, even with their plethora of existing apps. S60 sucked as a smartphone OS, even to the developers who wrote for it.

Meego was the way forward. It was built using Qt on top of Linux. It wasn't as popular as Android outside of Nokia and Intel, but it had a future. Just before the first Meego phone (N900) launched, Elop took over. It was killed without even given a chance. To answer your question, that is why Meego never competed with Android and the iOS.

Right as Elop took over, Nokia took a 180 turn away from Meego. They spent 3, 4 years completely redeveloping their processes, completely revamping their developers, wasting countless resources that were Meego-based, just so they could put Windows Phone on their hardware. And to boot, they produced some less-than spectacular phones for an OS (Windows Phone 7) that was going to die before it hit the shelves.

All those wasted resources could have gone to Meego, and polishing what was already a fairly good OS. They had an OS in-house that was close to being ready. Elop threw it out and spent a fortune bringing in a third-party OS which suffered from the same flaws as Meego (namely not having a large app base) and had no advantages over it whatsoever.

I'll skip the uglier parts of the analogy, but if Meego was Nokia's baby, created to ensure the survival of the company, it was forcibly aborted by Microsoft two weeks before a full term. Then Nokia took in Microsoft's then-newborn, inbred child, despite having been told beforehand that it was born with severe genetic problems and whom the doctors had already said would not live for more than a few months. This child drained all of Nokia's resources in the process, the excuse being that this had to happen to prepare for Microsoft's next child. Microsoft's next child turned into, well, nothing too special. And you wonder why Nokia's now broke and ultimately had to sell itself to Microsoft.

What? Corporations are people, no?

Re: It shoud have suprised no one

[X.25]

I don't know why everyone on slashdot has remained so deluded about Nokia's potential future had Elop not taken those actions. They were not competitive, and their prospects were poor.

Their prospects are really great now.

Re: It shoud have suprised no one

[TemporalBeing]

You missed a key fact: Elop took a good brand that now had only unwanted, aging products that could no longer compete, executed the most expensive failures, and sold the rest before the marketplace killed them completely.

Funny how they were still selling quite a lot of them until Elop came around.

Had he pumped hundreds of millions of dollars into Symbian, and tried to make a go of it based on an existing loyal fan base and lots of marketing, he would have ended up EXACTLY like Blackberry -- warehouses filled with unsold phones, flat broke, and completely irrelevant in the marketplace.

FYI - All those Symbian devs and their Symbian apps had a migration path from Symbian to Maemo/MeeGo.

Also Nokia didn't have the same issue BB had in having a central network that was essential to the platform and have a major crash that took weeks to fix and caused headaches for their customers. That is really why BB fell in market share - everyone was looking for something more reliable. BB10 is a great little platform, but they have a reputation they have to fix - something that takes a long time to do and they may not be able to recover from.

At least with Microsoft owning them, they're not broke. I don't know why everyone on slashdot has remained so deluded about Nokia's potential future had Elop not taken those actions. They were not competitive, and their prospects were poor. If Symbian and Meego were as great as everyone here imagines, why weren't they crushing iPhones back in 2010?

In 2010 MeeGo wasn't out. It was just about to be released when Elop wrote the "burning platform" memo; and during the presentation to the press he stood up on stage and said "We're not doing this; look I have another one running Windows Phone and that is our future" - intentially sabotaging it before it even hit market. Yet, as others have pointed out, with no marketing the MeeGo Phone outsold the Lumias wherever they were both sold in the same markets - and not by small margins - by 3:1 ratios. Every review of the MeeGo phones compared it to the iPhone; it would have been a killer - and at the very least a very strong third, leaving everyone else to fight for fourth - had it not been for Elop.

Re: It shoud have suprised no one

[alexander_686]

Expect it does not say what you think it says – this is it says:
          Motorola made sub-par phones and lost money.
          Motorola continued to make sub-par phones and switched to android and still loses money.
Nowhere do we find proof that switching to android affected profits. (and personally I doubt you ever will.)

What I find telling is the reference to HTC and it’s 98% loss of profits. If you pick android system you will be competing with every other android maker out there. When HTC found the sweet spot and made the best phone it raked in the money. When Sumsung found a new sweet spot it raked in the money and everybody else suffered.

Of course you could always push your own OS which makes it harder for people to switch. If you got a winning product like Apple like is good – you can set your own pace. If you don’t you end up like RM’s Blackberry – a long slow but inevitable decline.

Re: It shoud have suprised no one

[21mhz]

Just before the first Meego phone (N900) launched, Elop took over. It was killed without even given a chance. To answer your question, that is why Meego never competed with Android and the iOS.

Huh? The N900 was released in 2009. The N9 program was launched some time before that, and the device was released, after all, in late 2011.

Right as Elop took over, Nokia took a 180 turn away from Meego. They spent 3, 4 years completely redeveloping their processes, completely revamping their developers, wasting countless resources that were Meego-based, just so they could put Windows Phone on their hardware.

What alternative timeline you live in? The turn was announced on February 2011. The first Lumia was released in November the same year.

Re: It shoud have suprised no one

[TeknoHog]

Maemo could easily have been adapted to run android apps

It may be a little late, but this is exactly what Jolla has done. Perhaps Nokia will buy them back as the real smartphone division now that the crud has eloped to Redmond.

Re: It shoud have suprised no one

[TeknoHog]

Just before the first Meego phone (N900) launched, Elop took over. It was killed without even given a chance. To answer your question, that is why Meego never competed with Android and the iOS.

Huh? The N900 was released in 2009. The N9 program was launched some time before that, and the device was released, after all, in late 2011.

Also, the N900 runs Maemo which has nothing to do with Intel. Nokia had a line of Maemo tablets since 2005, and N900 was the last of these, finally allowed to include full phone capabilities.

Meego was intended as a merger of Maemo and Intel's Moblin, but it never really appeared anywhere (N9 is pretty much Maemo), and I'm not sure how exactly it was supposed to improve on Maemo. The name is not important, though, it's the idea of a regular GNU/Linux distro running on your phone. Which is why you can pry my N900 from my cold, dead hands, as long as you avoid stepping on my lawn.

Re:It shoud have suprised no one

[hairyfeet]

Riiiight, he and the board risked millions in fines and prison time all so they could tank the company in the HOPES that MSFT would buy them and not just wait until they collapsed and buy the best pieces...I have a bridge you may be interested in BTW.

Look its REALLY simple, okay? The board fucked up and let there end up not one, not two, but THREE different OSes, none of which could compete with iOS and Android. There best hope MeeGo/MaeMo was being actively sabotaged by both Symbian on the inside and Intel on the outside, and being the #1 dumbphone maker in this day and age of free Android phones from even the prepaid bunches was about as useful as being the biggest 8-track maker in 1987. So Elop was brought in to do the dirty work, kill the no longer update-able Symbian and to throw a Hail Mary pass and hope to gain some ground and...it failed.

so I'm sorry but they really didn't have any other option, they really didn't thanks to the board sitting on ass too long, a repeat of Palm. Ironically the best bet would have been WebOS but HP was willing to pay insane-o money for it so it was off the table, and Android is a shark tank that is in a race to the bottom. While Nokia can make dirt cheap dumbphones they have NOT shown the ability to repeat that in smartphones and there is no way in hell they would have been able to fight Samsung,HTC, and Huawei toe to toe, no way. All that was left was a Hail mary, hence the "burning platform" but there is a REASON why they call it a Hail Mary because it has but a slim prayer of working. If it would have worked I''m sure the Googleites here would be screaming how "It was all Ballmer's plan to take over Nokia!" so damned if you do, damned if you don't. Would you have rather he broke up the company and sold it like a corporate raider, like is what is likely to be the fate of BB?

Re:It shoud have suprised no one

[dbIII]

Riiiight, he and the board risked millions in fines and prison time

How often does that happen with such a multinational situation? Can you find one example?

Re: It shoud have suprised no one

[rtb61]

Which begs the question, why exactly did they hire Elop. What influence with the board of Nokia did M$ already have, what did it cost to get the Nokia board to basically set up Nokia for sale to M$ at a substantive discount, what commissions did the board receive. Now that Nokia has been crippled, has M$ shot itself in the foot because there will be no real recovery from collapse and continuing down the same path will simply result in greater loss of value.

Re: It shoud have suprised no one

[chris.alex.thomas]

jesus humping stupid christ, listen POSIX fanbois.....here is something important for you to listen to:

nobody in the real world cares whether your phones operating system is POSIX compliant, apart from some developers, nobody else....my mother doesn't care, neither do I and I am a developer.

what I want is a system that works, I couldnt care less whether it's POSIX compliant or not, I just want it to be usable and useful. If I got that from a system which was not POSIX compliant, I would still be happy because my goal is not to be POSIX compliant, my goal is to make a cool app and maybe sell it.

POSIX compliance doesn't guarantee that and doesn't actually help me reach that goal any better than not being POSIX compliant....

so can you please don't rambling on about shit practically nobody cares about....

android is practically smashing down the front door as the default linux environment on the planet and it eschews the linux system for an application layer on top of the system, so much for POSIX compliance being a winning strategy, linux is what, 5% total consumer market share?

yeah, keep holding onto those old fashioned values....they are working out GREAT!!!

oh and btw, you're full of shit, a full blown office suite on a mobile phone is an awful idea and wouldn't have sold anymore phones, having angry birds preloaded however would have easily doubled the sales....also, libreoffice? the office application that still looks like office 97? yeah....errrrr.....you're a fucking fruitcake if you think that's going to impress anybody...

How To Accomplish The "Elop Effect"

[Freshly Exhumed]

Tomi Ahonen has the formula down perfectly, with explanations:

ELOP EFFECT = RATNER EFFECT + OSBORNE EFFECT

http://communities-dominate.blogs.com/brands/2013/09/the-do-it-yourself-elop-analysis.html

Re:How To Accomplish The "Elop Effect"

[Anonymous Howard]

Yeah, but Tomi Ahonen is a moron. This is the same guy who claimed that Symbian was clearly the best mobile smartphone OS and would crush iOS & Android if only given a chance. Riiight....

http://communities-dominate.blogs.com/brands/2013/02/nokia-misery-in-single-pictures-today-part-8-in-series-the-elop-strategy-to-go-windows-from-feb-11-2.html

Re:How To Accomplish The "Elop Effect"

[Freshly Exhumed]

Yeah, but Tomi Ahonen is a moron.

Ah yes, good 'ol character assassination is alive and well here. Never mind the accolades Ahonen has received over the years, nor his lectures at Oxford, nor his authoritative books, nor his amazingly accurate record of predictions in the Mobile Phone industry, year after year, nor his personal network of staffers at almost every Mobile Phone company and provider in the world... nor how many times he made other supposed expert analysts look like fools (ZDnet, Howard Forums, etc. etc.)

Re:How To Accomplish The "Elop Effect"

[21mhz]

Never mind the accolades Ahonen has received over the years, nor his lectures at Oxford, nor his authoritative books, nor his amazingly accurate record of predictions in the Mobile Phone industry, year after year, nor his personal network of staffers at almost every Mobile Phone company and provider in the world... nor how many times he made other supposed expert analysts look like fools (ZDnet, Howard Forums, etc. etc.)

Never mind that, because very little of it is actually true.
For the record of his predictions, here's one.
Sorry, but Tomi is really a tedious moron who passes himself off as an expert to gullible people.

fun right back

[gbjbaanb]

What would be funny is if....

shareholders launched a court battle to prevent the takeover, and claim compensation and/or charges against Elop and while that dragged through the courts for years (as they do) the new CEO decided that actually, Windows phone isn't the profit thing he wants and changes the OS platform to Android across the board of Lumia phones, dropping Windows Phone completely.

Years later when the courts finally decide that "meh" is the answer to the charges, Microsoft can go ahead with the purchase for the manufacturing arm, if they still wanted to, and Elop could then find a new job - as I doubt even Microsoft would appoint him as CEO whilst he was fighting an active court case.

Could happen? hehehe. and you never know, Nokia could turn things around like Samsung did with Android.

(and yes, they could do Meego, but frankly this isn't about making a success of the company for Microsoft's benefit..)

Nokia were about to switch to Android

[edxwelch]

On a related note there is a rumour that Nokia were about to switch to Android just before the buyout.
http://ibnlive.in.com/news/nokia-reportedly-considered-switching-to-android-before-microsoft-deal/421972-11.html

This leads some analysts to speculate that Microsoft bought Nokia to save Windows phone:
http://www.valuewalk.com/2013/09/microsoft-bought-nokia-to-save-windows-phone/

Re:"Burning Platform"

[h4rr4r]

Because you don't have the money to buy the company, nor are you friends with their friends.

I would have driven their company into the ground for a mere fraction of what Elop was paid or squandered. Yet, they never called me.

Why did this make the front page?

[khb]

I'd expected something funny or at least insightful.

Sadly it seems neither.

But then neither is the actual situation. It is sad to see Nokia essentially go (yes, the corporation lives on, but without what had become the heart). And it is hard to see how there is an upside for Microsoft in this. A lose-lose, with bad actors taking home lots of cash.

Oh well, perhaps someday someone will turn it into a great play. It has all the seeds of a classic Greek tragedy (Hubris, fate, etc.)

Re:Why did this make the front page?

[NoNonAlphaCharsHere]

Never ascribe to hubris and fate that which can be attributed to incompetence and greed.

Re:Who gives a shit?

[nullchar]

Um, lots of people liked Nokia phones and platforms before they switched to Windows Phone. Similarly, people liked Blackberry devices and would have continued buying them had RIM not stalled out for a few years letting iOS and Android devices eclipse them.

We might as well have a laugh at failed tech companies to soothe our sadness. (I'm still sad about Oracle swallowing Sun.)

it's a free market

[stenvar]

Elop took over, Nokia stock fell, and anybody with half a brain didn't lose too much. Any reasonably smart Nokia employee would also have seen the writing on the wall and left the sinking ship. Microsoft can now acquire a mostly useless shell of a company at a low price, and they are getting their money's worth. The capital that Nokia lost went to other companies that can make better use of it. That's the way markets work. I don't think it's a big deal either way.

Incidentally, switching to Android "after late 2014" would have been too late for Nokia anyway.

Re:it's a free market

[Warphammer]

If I remember right, it's MUCH worse than MS getting the patents. Nokia keeps the patents, licenses them to MS, and has a warchest of billions to go help their friends Microsoft with suits from their patent portfolio, without the encumbrance of all the cross-licensing MS has done. It has the look of Nokia now being a supersized turbo SCO with enough of a warchest that you can't stop them by merely running them out of money. The extent to which Nokia has been destroyed as a company, then turned into a marketing vehicle for the otherwise worthless Windows Phone, and now into *both* a captive hardware unit and possibly the biggest 'independant' mobile patent weapon ever... It's just stunning. And the board just let it happen.

This should not be a surprise

[sl4shd0rk]

I don't know why anyone is upset about this. It shouldn't be a surprise. Tech history is littered with the remains of corporate entities who once partnered with Microsoft. What part of "Embrace, Extend and Extinguish" did Nokia think did not apply to them?

Re:This should not be a surprise

[erice]

I don't know why anyone is upset about this. It shouldn't be a surprise. Tech history is littered with the remains of corporate entities who once partnered with Microsoft. What part of "Embrace, Extend and Extinguish" did Nokia think did not apply to them?

At least the embrace and extend parts, perhaps all three.

"Embrace, Extend and Extinguish" refers to Microsoft adopting an externally developed cross platform technology (Embrace), adding proprietary features incompatible with the original (Extend), moving their own efforts and inciting/pressuring third parties to use the Microsoft extensions therefore wiping out the cross platform utility of the technology and any interest in the original form (Extinguish)

How does this apply to Nokia? As far as I can see, it doesn't. Nokia did not provide any technology for Microsoft to embrace, extend, or extinguish.

No, this is much less devious. More akin to "Nobody every got fired for buying IBM" than "Embrace, Extend and Extinguish". Microsoft honestly wanted to win in mobile. They (perhaps dishonestly) convinced Nokia that they would would win and Nokia would share in the winnings if they bet everything. Nokia came through. Microsoft just failed. It is pretty hard to imagine how Microsoft could prefer owning all of failing Nokia running a failing Windows Phone, over owning part of successful Nokia running a successful Windows Phone. The only one who gained is Elop himself.

Re:Who gives a shit?

[Arker]

Actually you should read the memo before you spout off. It's pretty funny. Sad that it's true though.

Re:How do we fix this?

[HornWumpus]

You want perpetually dying 'zombie' companies? Brains...er...breakeven...must...fund...retirements.

Better to put them out of their misery then leave them as millstones around an economies neck. Look at England in the '60s and 70s. Perpetual breakeven...nationalization...misery.

Re:Looks like you were had

[durrr]

There's more to be sour about than bad investments in this case. The whole nokia board and elop included should be dragged out into the street and shot for their extreme mismanagement of the company.

Re:They can't do MeeGo anymore

[TemporalBeing]

They've sold off MeeGo's crown jewels, Qt. Now Qt is powering the direct competition, from Jolla to Android, iOS and even WP.

Sure they could. They don't have to control Qt to do MeeGo - they could just buy back Jolla and what MeeGo became - SailfishOS.

Re:Looks like you were had

[tqk]

The whole nokia board and elop included should be dragged out into the street and shot for their extreme mismanagement of the company.

Did you read TFA (yeah, I know)? It says there was a clause in his contract awarding him a bonus for making the company "saleable." It was sold to Microsoft. Success!

Counter Argument - RIM/BlackBerry

[Luthair]

RIM stuck to their guns with BlackBerry, didn't save it and are circling the drain ever faster.

The Nokia stuff was old, Meego was not remotely close to ready (I worked in a shared office with someone contracted to help fix it and from his description a lot was still left when they shelved the product) so they had to make a change. Many of us questioned the exclusive WP choice but we'll never know if they'd chosen a split model or exclusively Android whether they could have convinced carriers to sell their phones. (For all we know discussions happened and carriers rejected them and MS tossed some cash around).