Mobile Devices set up for a three company competition - Apple, Google, and Microsoft

With Microsoft's acquisition of Nokia phone devices it looks like there is a three company race against Apple and Google.  Phones and Tablets are the growing faster than any other technology device.

One way to think about Mobile device companies is a three company competition.  Here is a post on three company competition and its history.

COMPETITIVE MARKETS AND THE RULE OF THREE 
by Jagdish N. Sheth and Rajendra S. Sisodia 
Strategy | 

The “Big Three” no longer have the automobile market to themselves, but almost every market, including the one for cars, is ruled by three dominant firms. That reality does not prevent other firms from being successful. However, all firms, regardless of their market share, must still understand The Rule of Three and how it will affect their strategy and attempt to operate efficiently.

Over the past several years, the world economy, principally in the developed free market economies of Europe and North America, has been characterized by a unique economic phenomena-the combination of mergers and demergers at record levels (demergers are the spin-offs of non-core businesses). As a result, the landscape of just about every major industry has changed in a significant way, moving inexorably toward what we call the “Rule of Three.” The recent economic downturn has slowed but not halted this fundamental evolution, nor has it altered its basic direction.

We note that the Rule of Three is much more than an interesting theoretical construct; it is a powerful empirical reality that must be factored into corporate strategizing. Understanding the likely end-points of market evolution is critical to the ability of executives to develop strategies that will result in success.

How Servers does Google have? 1 Mil cumulative in July 9, 2008

Microsoft's exiting CEO Steve Ballmer said Microsoft has a million servers.

 At the Microsoft World-Wide Partners Conference, Microsoft CEO Steve Ballmer announced that “We have something over a million servers in our data center infrastructure. Google is bigger than we are. Amazon is a little bit smaller. You get Yahoo! and Facebook, and then everybody else is 100,000 units probably or less.”

Google reached its million server cumulative mark in July 8, 2008.

How many servers does Google employ? It’s a question that has dogged observers since the company built its first data center. It has long stuck to “hundreds of thousands.” (There are 49,923 operating in the Lenoir facility on the day of my visit.) I will later come across a clue when I get a peek inside Google’s data center R&D facility in Mountain View. In a secure area, there’s a row of motherboards fixed to the wall, an honor roll of generations of Google’s homebrewed servers. One sits atop a tiny embossed plaque that reads JULY 9, 2008. GOOGLE’S MILLIONTH SERVER. But executives explain that this is a cumulative number, not necessarily an indication that Google has a million servers in operation at once.

When will Amazon reach a million servers?  When will Facebook?  Is it really that big of a deal.  Maybe if you are media and you are looking for a story.

To give you how clueless some people are.  Who cares how many servers.  The important thing is how many cores are there in the environment?  The number of cores and the quality of them is what is important to run services.  Not the number of servers. D'Oh.

Critique of the Microsoft-Nokia deal

GigaOm's Om Malik has a post on the Microsoft-Nokia deal that will give you a critical view.  One nugget that Om has dug up is what some of the Nokia insiders think.

In theory, Microsoft is getting a great engineering team, a great product design team and a great brand (well, better than Windows Phone). However in reality what it is not getting are the intangibles. In the course of my seven odd years of reporting on Nokia, I have met many talented people and many of them had a lot of pride in working for the company. It was the shining achievement of Nokia and its engineering culture. Even when things got bad over past few years, many believed that Nokia had the talent to help things around. I made a few phone calls this evening, and all I hear is a sense of quiet despondency and loss of hope. Working for Microsoft isn’t working for Nokia, is a common refrain.

The zinger comment is referencing Google's Vic Gundotra.

Vic Gundotra, Google’s sharp-elbowed senior executive who, like Android co-creator Andy Rubin, wanted to win over Nokia and bring it into the Android camp about two years ago, put it best when he tweeted: “Two turkeys don’t make an Eagle.” And while he might have ruffled some feathers in Microsoft and Nokia offices, his observation wasn’t that off the mark. Microsoft makes a mobile OS, that the market doesn’t seem to want. Nokia smartphones sales make drying paint seem like a John Woo thriller. It doesn’t matter from which angle you look, the combination of these two companies into a single entity doesn’t add up.

Om finishes with an upside to the deal.

If there is one upside, then I do believe that this just might be the best thing to happen to Finland and the Finnish startup scene. A lot of the talent draining out of Nokia will look for new opportunities in their areas of expertise — radio engineering, manipulating sensors and embedded systems. If anything, this is Finland’s big opportunity to become the epicenter of the Internet of Things.

Disclosure: I work part-time as an analyst for GigaOm and have watched Om in action first hand.  He knows what he is talking about.

Microsoft says Best of Times are ahead which means the past and present are the worst

Microsoft corporate PR has a response to the media coverage of Steve Ballmer's retirement.  Part of what Microsoft says is there are different ways to see the facts of the situation, referencing Tales of Two Cities and Rashomon.  The ending line is where the point is trying to be made.

So when people see the “worst of times” while we see the best still ahead of us, we know it’s simply because we’re not looking through the same frame or the same time horizon.

So, if the best of times are ahead it means that at the present and/or the past is the "worst of times."  And part of what the media has had is an uncontrolled response is pointing out the worst of times at Microsoft during Steve Ballmer's CEO time.

One of the worst times at Microsoft which was before my time at the company. When Microsoft was totally behind OS/2.  Here is the history of David Weise, the god father of Windows 3.0 and savior of Microsoft going down the path of partnering with IBM.

 You see, at this time, Microsoft's systems division was 100% focused on OS/2 1.1.  All of the efforts of the systems division were totally invested in OS/2 development.  We had invested literally tens of millions of dollars on OS/2, because we knew that it was the future for Microsoft. 

Yes Microsoft was committed with hundreds of people developing OS/2.  Windows was not a priority.  Windows was less important than the future bet on OS/2. What saved Microsoft from these dark and worst times of the company was David Weise.  It was sad to see DavidW leave in 2005, but I, DaveO left one year later in 2006.  (One of the geeky left overs from the early days of Microsoft is we called each other by our e-mail aliases.)

DavidW with a small team built Windows 3.0 and beat a team much bigger who was using IBM's software development process.

And here was this little skunkworks project in building three that was sitting on what was clearly the most explosive product Microsoft had ever produced.  It was blindingly obvious, even at that early date - Windows 3.0 ran multiple DOS applications in virtual x86 machines.  It ran Windows applications in protected mode, breaking the 640K memory barrier.  It had a device driver model that allowed for development of true 32bit device drivers.  It supported modern displays with color depths greater than had been available on PC operating systems. 

There was just no comparison between the two platforms - if they had to compete head-to-head, Windows 3.0 would win hands down.

...

The rest was history.  At its release, Windows 3.0 was the most successful software project in history, selling more than 10 million copies a month, and it's directly responsible for Microsoft being where it is today.

And, as I mentioned above, David is responsible for most of that success - if Windows 3.0 hadn't run Windows apps in protected mode, then it wouldn't have been the unmitigated success it was.

David's spent the last several years working in linguistics - speech generation, etc.  He was made a distinguished engineer back in 2002, in recognition of his contribution to the industry. The title of Distinguished Engineer is the title to which all Microsoft developers aspire, it is literally the pinnacle of a developers career at Microsoft when they're named DE - other DE's include Dave Cutler, Butler Lampson, Jim Gray, Anders Hejlsberg.  This is unbelievably rarified company - these are the people who have literally changed the world.

From the worst of Microsoft's times came a heroic brilliant effort to invest in Windows 3.0.  The story of what DavidW did is knows amongst the old time Microsoft and probably remembered as some of the darkest times when the company was young and a servant of IBM to develop a future OS.  If you tried to do what DavidW did it would get you fired at most companies.

It is interesting to see how some of the most innovative products come from those who don't follow the direction of executive leadership.  One way to view how innovative companies are is whether the smart people can survive within the official corporate heirarchy.  If you look at many of the companies like Apple, Google, Facebook, Amazon there is a separate innovative ecosystem that works across boundaries.  Most executives will squash this innovative ecosystem.  If Steve Ballmer and Bill Gates had they would have killed Windows 3.0 to support the development of OS/2.

Analysis The Next Microsoft CEO

Summary: The next CEO of Microsoft is going to be someone Bill Gates and his advisors trust and respect to fulfill the CEO role over the next 15-20 years. Microsoft is a company built on writing software, therefore the CEO should have the ability to support the vision of developing innovative software that leads the industry in growth.  Satya Nadella is a leading candidate.  What is unknown is what Bill Gates thinks of the other candidates vs. Satya.

Background: I spent 1980 - 1985 at HP and have observed the transition through multiple CEOs after David Packard. I was at Apple from 1985 - 1992 which gave me a perspective of the long series of CEOs until Steve Jobs returned.  From 1992 - 2006 I was at Microsoft and while working on software I saw a wide range of executives rise to senior positions.

Analysis: There is a wide range of media coverage on Steve Ballmer's announced retirement.  What few people state is why Steve Ballmer had the CEO job and what would lead Bill to choose the next CEO.  Bill is the Chairman of the Board, Founder, largest shareholder, and most influential person in Microsoft. Bill supported Steve Ballmer in the CEO job because Bill trusted and respected Steve to be the CEO to the best of his ability, a role that Bill had from the beginning and knows what it takes to be CEO of his company, Microsoft. 

You can find fault in what Steve Ballmer did, but he was always trying to do his best.  

“Peace of mind attained only through self-satisfaction in knowing you made the effort to do the best of which you’re capable.” – John Wooden

Who does Bill Gates trust and respect to be Microsoft's CEO?  Someone he has history with and the selection board agrees is the best candidate to run Microsoft in the best interest of shareholders of which Bill is the largest.  And someone who will make the effort to be best of which they are capable of.

Candidates:

Satya Nadella is mentioned most frequently in the media as a possible future Microsoft CEO.  GigaOm's Barb Darrow covers the range of CEO candidates. I know Barb and like her method of researching a post.

 I have already said I think Satya Nadella,  the executive VP of cloud and enterprise, should be on the very short list or prospective CEOs. One current Microsoft exec, who understandably can’t be quoted on this, agreed and added that Tony Bates, the former head of Skype who now heads up biz dev, should also be considered.

My perspective on Satya is different than many as I remember Satya from days of working on Microsoft's Interactive TV where he was a product manager and I was a program manager. We were chatting a bit back in June 2013 at GigaOm Structure. Satya joined Microsoft in Feb 1992.  I joined in Apr 1992.  Satya has worked in a wide range of roles at Microsoft and has taken the path of being groomed for executive leadership.

Paul Maritz was the #3 man in Microsoft after Bill and Steve.  Paul retired from Microsoft in 2000, and eventually EMC snapped him up to run VMware.  Paul still lives in the Seattle area.  What is unknown is how Bill and Paul get along after 13 years.

"During Paul's 14 years with Microsoft, he has played a key role in virtually every major initiative, from the evolution of Windows and Office to the .NET strategy," said Bill Gates, chairman and chief software architect of Microsoft. "Paul's vision and technological insight has had a major impact not only on Microsoft but on the entire computer industry."

"Microsoft is one of the great places on earth to work," Maritz said. "It has been a real privilege to have worked with so many wonderful and talented people and to have been able to participate in so many interesting and important endeavors. With the recently announced Microsoft .NET strategy now in place, there is an amazing opportunity to fully realize the potential of software and the Internet to change how people communicate and experience information. Microsoft is very fortunate to have a world-class generation of young leaders ready to step up to build on these opportunities and ensure Microsoft's continued success as the global leader in software technology."

Barb mentions Steve Sinofsky and Stephen Elop.  Steve and Stephen didn't leave with a glowing endorsement from Bill.  And it just sounds strange that a Steve/Stephen would take over Steve Ballmer's job.

Others speculate that Steven Sinofsky(pictured at right) who left Microsoft abruptly last year and just joined the board at Andreessen Horowitz would be a candidate.

Then there’s the whole Microsoft-will-buy-Nokia-to-boost-its-smartphone-business theory. That would bring Nokia CEO Stephen Elop, who was formerly Microsoft Business Division president, back into the fold as a potential CEO.

Two other executives who were inside Microsoft and and didn't last are Kevin Johnson and Bill Veghte.  If Kevin and Bill were potential CEOs wouldn't Microsoft had rotated them into other positions in Microsoft.  You could speculate that Kevin and Bill were CEO material, but didn't want to wait until 2017 when Steve Ballmer said he would think about retiring.

The list of executives whose names have been floated for the top job is long, including the likes of Yahoo CEO Marissa Mayer, Facebook COO Sheryl Sandberg and AOL CEO Tim Armstrong. Others mentioned include Nokia CEO Stephen Elop, Juniper CEO Kevin Johnson and Hewlett-Packard COO Bill Veghte.

In regards to Sheryl Sandberg, would Bill have an ex-Facebook/Google executive without software development expertise run Microsoft? not likely.

Speaking of Google executives, another is Vic Gundotra, SR VP of Google social who was a GM at Microsoft.  It would be so embarrassing to have a Google employee be Microsoft CEO, the PR would be tough to bear.

Among the list that Microsoft might consider are two India-born tech executives: Satya Nadella and Vic Gundotra.

You can see how it gets kind of ridiculous who the press thinks could run Microsoft.  Really, ex-Google execs to be Microsoft CEO.  Why not just hire Larry Page, Sergey Brin or Eric Schmidt?

People that Bill is probably talking to about who should be CEO are

Nathan Myhrvold

Nathan Paul Myhrvold (born August 3, 1959), formerly Chief Technology Officer at Microsoft, is co-founder of Intellectual Ventures—one of the largest patent holding companies in the world, as well as the principal author of Modernist Cuisine.

Rick Rashid

Richard (Rick) F. Rashid oversees Microsoft Research's worldwide operations. Previously, he was the director of Microsoft Research. He joined Microsoft Research in 1991, and was promoted to vice president in 1994. In 2000, he became senior vice president. He has authored a number of patents in areas such as data compression, networking, and operating systems, and was a major developer of Microsoft's interactive TV system. 

Craig Mundie

Craig James Mundie (born July 1, 1949 in Cleveland, Ohio[1]) is Senior Advisor to the CEO at Microsoft[2] and its former Chief Research and Strategy Officer.[3] He started in the consumer platforms division in 1992, managing the production of Windows CE for hand-held and automotive systems and early console games. In 1997, Mundie oversaw the acquisition of WebTV Networks. He has championed Microsoft Trustworthy Computing and digital rights management. 

Jeff Raikes, CEO of Gates Foundation, ex-Microsoft exec.

Jeffrey Scott "Jeff" Raikes (born May 29, 1958) is the chief executive officer of the Bill & Melinda Gates Foundation. Until early 2008 Raikes was the President of the Microsoft Business Division and oversaw the Information Worker, Server & Tools Business and Microsoft Business Solutions Groups. [1] He joined Microsoft in 1981 as a product manager.[1] He retired from Microsoft in September 2008, after a transitional period, to join the Gates Foundation.[2] Raikes is credited with driving much of Microsoft’s early work in business applications.

Whoever is the next Microsoft CEO it is going to be someone who Bill trusts and respects to run Microsoft.  Bill is the Chairman of the Board, Founder, Largest shareholder and the most influential Microsoft employee.  Bill is still a Microsoft employee he did not retire.  He transitioned away from day to day duties, and is still a Microsoft employee.

William (Bill) H. Gates is chairman of Microsoft Corporation, the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

On June 27, 2008, Gates transitioned out of a day-to-day role in the company to spend more time on his global health and education work at the Bill & Melinda Gates Foundation.

Bill works from a separate office and has a space to think about who should have his old job.

Setting a curious mind free

Bill Gates 2.0 will have three offices: one at Microsoft in Redmond, a second about 15 miles away at the Gates Foundation in downtown Seattle, and a third almost exactly equidistant between the other two (and much closer to home). In typical hyper-systematic fashion, Gates has allocated blocks of time to each location: a day in Redmond, two at the foundation, and two at the personal office, which he suspects will be his real "center of gravity." There will be a lot of overlap among his three roles. That's because the guy's greatest pleasure seems to be in finding connections among things he's interested in.

The biggest change, of course, will be in his workload at Microsoft, which will drop drastically. He'll remain chairman and weigh in here and there. "Other than board meetings and consulting on projects like Internet search technology, the only things I'll do are some company visits when I'm in developing countries," he says. "Or if there's some special award for someone at a company meeting, I'll come and present it. But that's about it." (For more on how Microsoft is coping with Gates' retirement, see the accompanying story.)

...

"The classic CEO needs to be right, or rather needs to appear to be right more than he needs to actually be right - and that's not Bill," says his pal Myhrvold. "Lewis and Clark were lost most of the time. If your idea of exploration is to always know where you are and to be inside your zone of competence, you don't do wild new shit. You have to be confused, upset, think you're stupid. If you're not willing to do that, you can't go outside the box."