Microsoft-Nortel Parallel
January 23, 2009
Matthew Nickasch’s “Could Microsoft Become Another Nortel?” here is an article that would not have occurred to us in Harrod’s Creek, Kentucky. We don’t think too much about non search vendors and Nortel is not a player in the space we monitor. Microsoft is a search vendor. The company has Web search, various test search systems which you can follow here, Powerset (based on long standing Xerox technology), Fast Search & Transfer (a Web search company that morphed into enterprise search then publishing systems and now into conference management).
Mr. Nickasch picks up the theme of the layoffs at Microsoft that were triggered by the firm’s financial results reported in January 2009. For me, the most interesting comment in the article was:
Many large companies have much to learn from the recent events of Nortel, who filed for bankruptcy protection last week. Organizations with disjunct structures and complexly-integrated business functions need to critically evaluate their overall business structure.
I am not a fan of MBA speak, but I absolutely agreed with the use of the word “disjunct”. That is a very nice way of saying disorganized, confused, and addled (just like the goose writing this Web log). Nortel, once a giant, is now a mouse. A mouse in debt at that.
Three notions were triggered by Mr. Nickasch’s apt juxtaposition.
First, could this be the start of a more serious effort to break up Microsoft? Unlike Nortel (Canadian debt, government involvement, global competition), Microsoft could be segmented easily. Shareholders would get a boost from a break up in my view.
Second, what happens to orphans like big dollar acquisitions that have modest profile into today’s competitive enterprise market. I hear about SharePoint. I hear about Silverlight. I even hear about Windows Mobile. I don’t hear about ESP. In case you have forgotten, that’s not paranormal insight; that’s enterprise search platform.
Third, what’s the positioning of on premises software versus cloud software. Microsoft has quite a few brands and is at risk in terms of making clear what tool, system, service, and feature is associated with what product line.
In my opinion, I think Mr. Nickasch has forged a brilliant pairing. A happy quack to him.
Stephen Arnold, January 23, 2009
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