Outgoing Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer wrote a letter to employees intending to explain the rationale behind the acquisition of Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) along with the changes in the organization structure as a result of the acquisition.
Microsoft has taken a bold step, according to Ballmer, and the next big phase of transformation “we announced on July 11.”
Deal will combine the best mobile efforts of Microsoft and Nokia
Ballmer started the letter by saying, “We announced some exciting news today,” then went on to say that the company has entered into a deal with Nokia to acquire its Devices and Services business, which incorporates the smartphone and mobile phone businesses, the award winning design team, manufacturing and assembly facilities all over the world, operation teams, sales, marketing and support.
Ballmer said that it is exciting to bring the best mobile efforts of Microsoft Corporation (NASDAQ:MSFT) and Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) together. Partnership with Nokia over Windows phone has molded into a successful attempt with some incredible work, Lumia 1020 stands out as an apt example. He said that Nokia Lumia Windows phones are the fastest growing phones in the smartphone market.
Ballmer said that this is the right time to capitalize on this momentum and increase shares and profits in the phones. The opportunity will be higher with success in the phone segment, and will support the strategy of creating a portfolio of devices and services for individuals and businesses that give better products to the people, at work and on the go.
Microsoft Corporation (NASDAQ:MSFT) CEO holds that it is a good deal for both companies. He said that the company is acquiring incredible talent, technology and IP.
“Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we expect a smooth transition and great execution.”
Employee level changes
Ballmer said that the highest priority at this point of time is to close the deal as soon as possible, probably by the first quarter of 2014, after getting approval from Nokia shareholders, regulatory approvals, and other closing conditions.
The CEO said that Stephen Elop will join Microsoft again after the deal is concluded, and will head the greater device team including current Devices and Studios work and most of the teams coming over from Nokia, reporting to him.
Julie Larson-Green will hold the position as head of Devices and Studios team and will be equipped primarily with the big launches this fall including Xbox One and our Surface enhancement. Julie will join Elop after the deal is completed.
Microsoft Corporation (NASDAQ:MSFT) will retain Nokia’s sales field team, headed by Chris Weber, to speed up the sales and maintain the rate. After the deal is concluded, Kevin Turner will be head Chris and his team.
Terry Myerson will be responsible for the operating system team to support both first party and third party hardware innovation. Ballmer said that the company is committed to working with partners and assisting them to come out with great products and great business.
Tami Reller and Mark Penn will look after global marketing.
Department level restructuring
Finance, Legal, HR, Communications, DX / Evangelism, Customer Care and Business Development will integrate functionally at Microsoft. Sourcing, customer logistics and supply chain will be part of Stephen’s Devices organization. ICM / IT will also integrate functionally for traditional IT roles. “We will need to work through the implications for factory systems given the differing manufacturing processes and systems at both Nokia and Microsoft,” Ballmer said.
Microsoft Corporation (NASDAQ:MSFT) plans to develop a single set of supporting services for the devices and will look forward to integrate the efforts of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and Microsoft together. He said that teams at Nokia will not be shifted and will stay at the same place. Tom Gibbons will lead the integration work for Microsoft.
He ended the letter by saying, “While today’s announcement is big news, we have to stay heavily focused on running the current business. We have a huge fall and holiday season ahead of us, so we need to execute flawlessly and continue to drive our business forward. I have no doubt we will.”