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Nokia and Microsoft: What happens when a couple of big beasts get together?

Press release February 14, 2011 Business

Will Nokia and Microsoft be a match made in heaven?

Being that some of us may be celebrating the endeavours of a certain St Valentine this week, let’s spare a thought for last week’s announcement that Nokia were about to jump into bed with Microsoft. That tryst didn’t really come as much of a surprise. Not only did new CEO Stephen Elop have the obvious connections as an ex-Microsoft acolyte but on paper there was probably nowhere else for either of these big beasts to go. Between them they have managed to prove that simply being the marauding T-Rex of your jungle doesn’t guarantee you long term survival. Furthermore, the two behemoths demonstrated a continuing inability to withstand the outmanoeuvring by more dynamic, focused and aggressive competitors.

So, one big beast plus another big beast must equal a colossal beast? Will that add up to make either of them more equipped to withstand the conditions of the new ecosystem around them; possibly quite the opposite. The rules of the jungle have changed over the past five years and it is clear the new comers like Apple, Google, and RIM are following the tried and test Darwinian model of being more able to adapt to changing conditions. They’ve spent the last half decade eating the breakfast of the big beasts in the jungle – now they look like they might even get around to having a piece of them while they are at it. Apparently new boys like Facebook and Skype may have ravenous appetites too.

Whilst the corporate splicing of the respective gene pools of Nokia and Microsoft will no doubt be passed off as a bold business strategy, it remains to be seen whether this will result in a fundamental assault on the new order. Undoubtedly Nokia and Microsoft respectively have significant heartlands and joint assets to draw upon. But essentially the reason they missed out on the first place was that their strategy was too preoccupied with manufacturing and functional thinking as a way to dominate the market – and far less on building their own sustainable ecosystems based on customer experience, brand affinity, loyal fan communities and the innovation of tribes internally and externally. Meanwhile, their fleeter competitors spotted this shift and accelerated it. From a standing start in 2008, Android has been growing market share a 600% per annum and is set to overtake both Symbian (Nokia’s operating system) and Microsoft for Mobile put together. (source: Raconteur Media)

So, what does that signal for the new couple? The pitter patter of a radical and innovative new progeny? Or more lumbering in the belief their place in the jungle is preserved. It’s like when your parents are making out upstairs. You know it’s going on – you just don’t really want to be forced to imagine it.

Meanwhile, size may or may not count in the final reckoning but certainly to be fit for the longer haul, there needs to be more than size to avoid extinction. Responsiveness, insight, agility, boldness, innovation are all cultural attributes that are commonly in short supply the bigger you get. The attributes that might make you Lord of the jungle when you are in a predictable and steady growth market are likely to leave you stranded in one which is unpredictable and dynamic.

But what actually happens when you realise you are a dinosaur in a rapidly shifting climate that doesn’t favour you? It seems the greatest pain is changing – even greater than trying to multiply with an even bigger dinosaur.

But let’s not spoil the announcement – after all every union is entitled to a honeymoon period; particularly in this week of all weeks.