Who Will Own Enterprise Social Media?

I was at info360 last week which is the new name for what used to be the AIIM conference and trade show - the annual gathering for the content management industry. After seeing what’s exhibited and listening to some of the keynotes, it was apparent that social media was the big buzz at the show. The emphasis was of course on enterprise social media - those systems of engagement that demand the same user appeal and viral adoption as Facebook or Twitter but with the underlying security, compliance, and legal risk mitigation needed by organizations.

Most software vendors have some sort of enterprise social media story to tell. Pretty much every vendor at the show from OpenText to Microsoft, Oracle, and even Box.net did. And many of the vendors who don’t go to content management shows are now players too - from Jive to Salesforce.com. Everybody wants a piece of the social pie.

Now that begs the question - what will the future landscape of enterprise social networking look like? Are we going to end up with multiple systems of engagement deployed across the enterprise? Is Sales going to talk to each other via the Salesforce.com social offering Chatter, while Finance will use the social capabilities in the ERP and Support will use whatever their service management tool provides? Is the future of social networking relegated to groupware? Is the corporate memory going to be contained in a dozen disjointed systems?

Hopefully not. The value of public social media lies in its openness - anybody has access to Facebook and Twitter. Facebook became big only after it was open beyond the relatively small communities of Harvard and Stanford. For social media to deliver on its expected value, it has to be deployed across the enterprise - and beyond.

That would seem to disqualify the vendors that by their nature address only a particular function of the enterprise. Only sales people have Salesforce.com licenses and even they need to be forced to use it. While Chatter might help the adoption, enterprises are not likely buy SF.com licenses for every employee. Same is true for any other function-specific software such as CRM, marketing automation, product lifecycle management, service management, or ERP.

That would suggest that social media solutions stand a greater chance to succeed across the enterprise if they are provided as part of the infrastructure - communication infrastructure, office infrastructure, process infrastructure, middleware infrastructure or content infrastructure. This is the kind of software that can and often does span the entire organization and adding social media capabilities makes sense not only technically but also from the point of view of my argument. And indeed, most vendors such as Cisco, Microsoft, TIBCO, Oracle, or OpenText have a social media strategy.

It is becoming apparent that social media is not likely going to be a separate category of software but rather a component of the overall software infrastructure - part of the information fabric as someone called it at info360. Even with the infrastructure vendors, there is a lot of candidates vying for a piece of the action. Thus, we are likely to see some consolidation of the technologies, some degree of integration and interoperability and eventually perhaps even some standards. No matter what, it will be a fun ride over the next couple of years as social media becomes part of everything we do - just like the Internet did over a decade ago!

One Year as a Blogger

March 22 marks the one year anniversary since I have started my blog. That's a good opportunity to revisit the experience and share it via a blog post (of course).

The Why
Why did I start a blog? Not a simple answer really. Yes, I’ve had some vague idea about my thought leadership mojo. Also, being in marketing, I have this inherent urge to share my opinions with the world and a blog is a good outlet for that. But mostly, I wanted to lead by example and motivate others around me to join in. That strategy is working today as more and more of my co-workers are joining in. I am not the first OpenText blogger, not the most read one and certainly not the most prominent one. But I am the one willing to contribute and to make any mistakes to help pave the way for others.

The How
I knew that to make a blog successful, I would have to blog regularly. I see a lot of bloggers who write a post once every two or three months and while that is still a blog, I wanted to do something more active. I was resolved to write at least one post each week. I have ended up writing 68 posts in the 52 weeks - well ahead of my goal.

My biggest concern was finding enough topics to write about. I was worried that I’d just be sitting there, 7 days since the last post without any idea what to write about. What an agony! But in reality, the ideas have never been an issue. They are popping up every day and I have several blog posts started at most times. 

The Focus
One of the questions every blogger needs to answer is the scope and focus of the blog. The name of the blog ought to reflect that. I knew I wanted to keep my blog fairly broad because that's what my interests are. There are some bloggers who can be interesting writing about the impact of social media on the enterprise every week but that wasn’t particularly appealing to me. Instead, I wanted a fairly broad set of topics that interest me. They are of course all focused on technology and my topics usually fall into one of my key areas of interest - content management, mobility, social media, security and lately also copyrights.

The Job
Another issue was whether or not to write about my job and my employer. That was not my original intent. In fact, I have initially tried to keep some distance and even today I don’t syndicate my blog through OpenText’s web site, I still like the idea of being independent. I have, however, broken this self-imposed rule with the G20 Summit report which immediately became my most successful post at the time. Since then, I am selectively covering other major milestones such as major product launches and acquisitions. They scored all very well - among the top 10 most read posts, five are on OpenText related topics.

I am trying hard the to keep the OpenText coverage personal by adding some insight. That’s not always easy since I am often the guy who’s behind the messaging that you see in press releases and other communication. But I’m doing my best. My post What Was Not In the Press Release about the ECM Suite 2010 launch was a huge hit and I was really able to say many things we wouldn’t normally say in the release.

The Promotion
Nothing is more disheartening than a great post that I have worked on for a couple of weeks with dismal results. Promoting my blog posts is a challenge though. I mostly rely on Twitter, forcing myself not to tweet about a particular post more than 2-3 times to avoid being a turn-off. I have experimented with all sorts of times of the week and times of the day but best appear to be posts at the beginning of the week with the first tweet early in the morning.

I am syndicating my tweets automatically to LinkedIn which generates a decent volume of traffic and I am also posting my blog post links on Facebook with more modest results. I have experimented with Xing, Reddit, and other sources of traffic but the results were dismal. Finally, I post the links to my blog posts on our internal social network based on OpenText Pulse which does generate some percentage of traffic, particularly for OpenText related topics.

The Outcome
Looking back after one year, my blog has been visited by visitors from 80 countries and even though I know that some were better than others, I am proud of pretty much every single article I’ve posted. Several articles received many comments either directly on the blog or per Twitter and Facebook. I am also proud of those articles that got quoted by other blogs or publications. And I am very excited when journalists or industry analysts mention that they read something on my blog.

Interestingly, my blog has received some degree of notoriety inside of OpenText. Many of my co-workers read it and the posts featuring some of them have made certain internal splash (e.g. Yes, They Could Be Models or Mobile Device as a Primary Interface). Several of our senior executives mentioned that they read my blog and a few of them even said they enjoy it. I got a tad nervous when independently our CFO, CMO, and our head of HR all mentioned my blog. But so far, I have not been called into anyone's office because of a blog post. 

Finally, having written a blog post on a particular subject makes me much better prepared and more articulate when discussing the subject with others - whether that's customers, journalists, analysts, or co-workers. I have never anticipated this benefit but I often refer to my recent blog posts when talking to others - sometimes directly but mostly just in my mind.


And so I guess I’ll just keep on blogging.


PS: Here are the top 10 posts on my blog from last 12 months:
1. Content Management Predictions for 2011
2. OpenText Acquires StreamServe
3. Corus Entertainment and the High Priesthood of Content Management
4. What Was Not in the Press Release
5. Geoffrey Moore, AIIM, and the Future of ECM
6. Yes, They Could Be Models
7. OpenText and Oracle - the Secret of Ecosystem Strategy
8. To SaaS or Not To SaaS?
9. The Fallacy of Twitter
10. EMC Content Management Family Tree

Call to Arms: Bring Down the Tyranny of Excessive Copyrights!

E. Delacroix: Liberty leading the People

I am re-reading Lawrence Lessig’s book Free Culture which I consider one of the best business books of all times. Professor Lessig very eloquently explains the idiosyncrasy and – yes – idiocy of the current copyright laws. This is an area of great interest to me as it directly impacts the use of content which is what I do for a living. I also feel very strongly about the freedom of speech, uncensored culture, free enterprise, and consumer rights. And all those things are being mangled by the current copyrights and content distribution rights.

The book isn’t old but it was published in 2004 which was the pre-Facebook era. Reading the book in the times of social media has put the copyright problems discussed in the book into a new perspective. In short, social media adds a new dimension to the copyright problems today. Let me give you an example.

The LEGO Group, the Danish toy powerhouse, is very interested in having their users share their ideas about how to build various toys out of their blocks. The users are kids and kids have no idea about copyrights. Kids want to build spaceships and structures that they draw upon from popular culture that they are exposed to. Star Wars and Star Trek are a big hit in the popular culture of 6-10 year old boys and so they build Star Wars and Star Trek space ships and characters made from the Lego blocks. So far so good.

Lego encourages its users (remember they are kids) to share their creations via digital models and pictures on their social media site MyLego Network. Lego is of course keenly interested in this kind of engagement since it indirectly stimulates brand loyalty, usage and incremental purchases of their products. But here comes the conundrum.

Lego has signed an agreement with Lucasfilm Ltd. and so discussions about Star Wars space ships and characters are licensed use of copyrighted material. In fact, Lego sells a galore of toys under the Star Wars brand and everybody is happy. But, as far as I know, Lego does not have any agreement with CBS Studios which owns the copyrights for Star Trek. That means that when my son posts a picture of his rendition of Luke Skywalker’s Starfighter in the Lego network, it is perfectly legal.

However, if he posts a picture of his take on Starship Enterprise, he technically violates the CBC copyrights for non-authorized creation and distribution of derivative work. Yes, the copyrights today no longer allow free creation of derivative work based on copyrighted material. And in fact, Lego can be held liable if the picture is shared on a community they sponsor because they effectively profit from it. 

Well, I say, this is nonsense. Like it or not, dear Lucasfilm and CBS, your work is part of our cultural heritage and as such, the use of cultural good has to be accessible to people and serve as source of learning, inspiration, and criticism. I agree that the creator of content should get paid and I agree that a copyright should protect the creation for a reasonable time. But 95 years [basically indefinite] is not a reasonable time - patents are being granted for max 20 years! I also know that the Internet has made it easier for your content to be distributed without a payment. But the excessively paranoid copyright protection you and the rest of Big Media have put in place is not only becoming absurd, it is damaging our culture.

It is a great privilege to become part of any culture. Almost all authors wish they would make it. Most of them create – at least initially – for idealistic reasons such as inspiration or the need to share a story. They don’t start with the need to protect their copyrights. That comes when the money becomes a topic - a topic that you, Big Media, introduce to the artists. You have used your position of strength to make Congress modify the copyright laws to serve your profits and not the interest of the society which the copyrights were originally created for. And you did it out of denial and fear because the world around you has evolved. 

The new technology is threatening your old business models and you have enacted laws that deprecate and ignore that technology. Today, you are the dinosaurs and if you don’t evolve you might become extinct. If you produce content, you need to be part of the culture with everything that distinction carries with it. You have to adapt to the environmental changes and embrace the technology because if you don’t, WE WILL do it for you.

We, the People, have now a new weapon that didn’t exist a few years ago. A weapon that has proven to be so powerful that it can not only put the most powerful man in the world into his office but also overthrow dictators who lost the touch with their people. That weapon is social media – Facebook and Twitter and YouTube and Slideshare. And this weapon will soon be aimed at you, Big Media. Millions of people around the world will organize, coordinate, and speak out jointly their will to overthrow the laws that so conveniently protect you.

The copyright and distribution laws have been enacted out of your position of strength because until now, it was you - multi-billion dollar corporations - against the little man. Soon, it will be you against the will of the People. And People have the power to change the laws or even the lawmakers if they are unhappy. No amount of lobby dollars will help you stem this revolution. Don’t wait for that to happen because there is no country of exile for overthrown Big Media dictators.

OpenText to Acquire weComm

Just a couple of weeks ago I wrote a post about the OpenText acquisition of Metastorm and now there is another one. OpenText just announced an agreement to acquire weComm, a UK-based vendor focused on the mobile application space.

OpenText has been rapidly innovating in the mobile space by releasing two new versions of its flagship mobility product OpenText Everywhere last year. With weComm, that innovation is quickly reaching another level. We at OpenText understand that mobile devices are quickly taking over the desktops as the primary user interface. In fact, many of our customers and prospects are telling us that.

It's a heterogeneous world out there!

Just recently, we got engaged in some government related opportunities in the sub-Saharan Africa. What’s amazing is that in those countries, the PC based infrastructure has never been developed. The people simply can’t afford PCs and yet they all have their mobile phones and so the government is exclusively targeting mobile users with their online services.

Online mobile services are bifurcating into two distinct approaches: mobile web and mobile apps. I just wrote about the mobile web in my previous post – this has been a big part of our focus on the Web experience management site for a while. The idea here is to leverage XML to easily create an optimized experience for users accessing web-based services through a mobile browser.

OpenText’s mobile apps strategy has been so far focused on OpenText Everywhere which is basically a mobile extension of all key ECM functionality such as document management, collaboration, and workflow. This is an application that OpenText built for its customers who can use it out of the box with their existing OpenText ECM Suite deployments. But with weComm, OpenText Everywhere really is everywhere.

What many customers need is to build their own mobile content applications (MCA). Such apps can be focused on anything from entertainment and gaming to publishing, experience, computing, commerce, etc.  – these apps typically use the Web to access some type of information updates from public or private sources. OpenText can’t create all of these apps – each customer will likely want to create their own app; distinct from its competitors. In fact, many customers I have spoken to want to create a multitude of apps each providing different, distinct industry specific functionality.

All types of apps have one thing in common. They need to be optimized for each respective mobile device to provide the best user experience. And optimal experience is the key to success; particularly in the consumer space. The problem, however, is the number of permutations of mobile operating systems (MOS), screen sizes, and technical capabilities such as bandwidth, Flash support, etc. that need to be supported by these apps. And the devices and their MOS keep evolving as well which makes the creation and maintenance of such apps very costly.

This is the exactly where weComm can help. It provides what is called a Mobile Enterprise Application Platform (MEAP) – a platform that enables customers and vendors to build, manage, and maintain mobile applications easily and cost effectively. Many our competitors don’t have a clear mobile strategy today and even those that do, don’t have an answer for the problem of creating, managing and maintaining mobile apps for all the different devices. OpenText embarked on its mobility strategy early on and today, we are a leader in this space. Just see for yourself what Stephen Powers from Forrester wrote in his November 2010 report titled Mobilize Your ECM Strategy: “Open Text has been at the forefront of ECM-related mobile strategy, offering Blackberry access to many components of its ECM line, with plans to extend support to other mobile devices in the near future. Others have jumped on the mobile bandwagon as well…” 

With this acquisition, OpenText is further extending its leadership in content mobility.

Web Experience Management in the Mobile Era

I had the opportunity to participate in an interesting conversation during a customer visit a few days ago that I think deserves a blog post. The customer - a company in the consumer packaged goods market - is facing an interesting challenge. They have today approximately three dozen web properties and each one of them is being translated into dozens of languages. If you do the math, that makes over 400 sites. This is already a pretty complex scenario that requires a web content management solution.

However, that this is only the beginning of the problem. So far, all the web properties have been designed for the desktop browser which is really easy. Desktop browsers are all the same when it comes down to user experience. However, the company is already gearing up for the mobile era. In fact, they told us they expect that the desktop will be relegated to a niche and that the mobile device will take over. They expect that the mobile device will become the primary user experience.

But this is where the problem lies. Mobile devices are by far not as homogeneous as desktops today. In fact, they may need to support at least six mobile operating systems - Apple iOS, Google Android, RIM BlackBerry, RIM PlayBook, Microsoft Windows Phone 7, and HP webOS. Each of the mobile operating systems has its own quirks and limitations - i.e. some support Flash and others don’t.

On top of that, each device has a different form factor and screen resolution. For example, the iPad is bigger than the iPhone, though both use the iOS operating system. The iPhone ‘retina’ display can handle a higher image quality than a similar device using Google Android even though both screens have the same size.

This multitude of operating systems and form factors leads to an explosion of different permutations in user experience - there are literally hundreds of them. And dealing with them is the job of the web content management (WCM) system.

The WCM system is able to identify the device and deliver the right content in the right template. That means that each content asset has to be readily available in a multitude of formats and resolutions. In addition, all images need to be re-sized, re-formatted and adjusted for the target devices. Video has to be converted and re-sized as well.That’s the job of a digital asset management (DAM) solution. These are the cornerstones of proper web experience management in the mobile era.

The key is not to cut any corners. The customer’s goal was the best possible user experience and they understand that the right user experience requires the right content in the right format and form factor. But they also understand that performance is an essential part of user experience and delivering content with the highest possible speed means to deliver it in the optimal resolution.

Mobility is the new frontier for web experience management. Mobility adds a tremendous reach. Just think about all those countries that never had the opportunity to deploy a desktop based infrastructure and that are now going directly to mobile web. But to do mobility right, user experience has to be a priority. And with the multitude of sites, languages and devices, that could be a daunting task without the right tools.

In Her Majesty’s Service

On the curvy path of destiny, I found myself living and working in Canada. It was certainly not by design - I didn't dream about living in Canada when I was a kid. In fact, I was probably dreaming about living in California which I have ironically ended up leaving for the job in Canada (and yeah, I do miss the sunshine - especially in February). But Canada is turning out to be a great experience and I will share some of it today.

At the Canadian Embassy in Washington
- the only Embassy on Pennsylvania Ave
and it has a great view of the Capitol!

I work for OpenText, one of Canada's largest technology companies and being a Canadian company, we have a strong presence in the country. Besides the headquarters in Waterloo, we also have major development sites in Ottawa and Montreal with sales folks sprinkled around the country. This level of Canadian presence carries some weight with the Canadian government which is not only a customer but also a partner.
 
The Canadian government and particularly the Trade Commissioner Service of the Department of Foreign Affairs and International Trade is chartered with the promotion of the Canadian economy through international relationships. Just like any promotion, a few poster-children are always useful to prove its impact. And OpenText has become such a poster child, helping the government and vice versa.

With the Czech Ambassador to Canada 
at his recent visit in Waterloo.

What that means in practice is that the government helps OpenText leverage international contacts with the goal to promote the Canadian economy. And OpenText helps the Canadian government demonstrate that we can handle some of the most demanding customer problems. Since our successful project at the G20 Summit in Toronto last summer when we delivered the social collaboration site for the summit, there have been many other governments and multi-lateral organizations that are interested in leveraging our expertise. 

Canadian Ambassador to Sweden 
at an OpenText event

As a result, our team is now jetting from Ottawa to Stockholm, Singapore, Pretoria, or Dubai. Who would have thought that we would be meeting with senior diplomats and government officials around the world but that's exactly what's happening. In fact, we sometimes jokingly refer to ourselves as the "OpenText Diplomatic Corps".

So here I am, representing the joint interests of a Canadian company and the Canadian government while working to inspire all people in the world to work, interact, and innovate in a secure, engaging and productive way. And since the head of the state of Canada happens to be the Queen of England...you get the silly headline now, eh?
 

The Queen of Canada

The Mobile Battleground

The mobile wars are raging at full swing right now. The key players include Apple, Google, RIM, and Microsoft. The battle lines have been drawn based on the mobile operating systems but there are in fact, at least three fronts:

1. Devices
What’s a little puzzling is how the smartphone manufacturers expect to compete. Today, HTC, Samsung, LG and Sony-Ericsson all ship smartphones with the Android operating system which means that they all have the same functionality and applications. For now, the phone features are still distinct as they have different sizes, cameras, or expansion slots but within a year, they will all likely be identical. The Windows Phone 7 phones will face the same challenge as I have already described in my take on the Microsoft-Nokia partnership. Clearly, only Apple and so far RIM have a differentiated strategy as they own the hardware and operating systems and don’t license it to other vendors. HP could be in the same boat but they have yet to ship a device.

2. Apps
It’s all about the apps, baby. Actually, it is about application developers since they are the ones who have to be compelled to build their apps for the respective mobile operating system. Maintaining the apps for the multitude of OSs is very costly and so most developers want to focus on 1-3 systems. The spots 1 and 2 are today firmly in the hands of Apple and Google and therefore position 3 is highly contested by RIM, Microsoft and HP. RIM has some lead based on their market presence but Microsoft has more experience in courting developers and so the game is on. HP has no market share, no developer ecosystem and no applications to speak of - a tough hill to climb.

3. Services
Besides applications, most mobile operating system vendors have a deeper agenda - they want to provide online services that consumers use on their mobile devices. Mobile devices are the key to some of the consumer spending online whether it’s by selling content or advertising. And the consumer power and profits associated with these services are just as compelling as the mobile market itself. Apple has clearly figured it out first and that’s why the company is today making piles of money on mobile devices and on selling music and movies. Google is leveraging its power in search to drive consumer advertising and even RIM figured out that the free BlackBerry Messenger is a very powerful service that drives consumer demand for its devices.

The table below compares the consumer stack of key contenders. It shows not only who provides which service but also contrasts it with the leader in each respective category:

Comparison of the consumer stack among the mobility players.

 The color represents the heatmap - the darker the color, the stronger a given vendor is at that particular service of the consumer stack. As we can see, Apple and Google have a pretty solid position with most services covered and many of them strong. Microsoft has made big strides towards having most bases covered but many of them are lacking on traction. What’s also interesting is that, in so many areas, the leading service is provided by a vendor without a mobility agenda. This hints at possible partnerships - the way RIM has embraced Facebook and Twitter by developing their own BlackBerry apps. I expect that more such partnerships and even acquisitions are likely.

The consumer stack is an important factor in the mobility war. The mobile vendors want to take advantage of their strengths but they will need to be careful not to overtax the users. Google, for example, wants to leverage its search-based advertising but too much of that will be a turnoff for mobile users. Microsoft wants Windows Phone 7 users to live in Windows Live but since this service has relatively low adoption, they must not lock the users to their own consumer stack. The vendor who gets it right will reap the benefits on both ends - making money off the devices as much as off the services. Just like Apple does with iPhone, iTouch and iPad and the music and movies content.

OpenText Acquires Metastorm

OpenText announced today the completion of the Metastorm acquisition. We do many acquisitions at OpenText but this particular acquisition is very interesting for a multitude of reasons. Metastorm is the leader in business process management (BPM) which is a discipline quite related to enterprise content management (ECM). In fact, enterprise content management has long included a process-centric category of solutions called transactional content management (TCM). Kyle McNabb and Connie Moore from Forrester were perhaps first to articulate this category in their groundbreaking 2005 report titled Transactional, Business, And Persuasive Content: A Better Way To Look At Enterprise Content.

Metastorm headquarters in Baltimore

The TCM solutions deal with optimization of business processes that involve content. In fact, at least half of all business processes involve content: a received fax, scanned paper, or submitted form. The Metastorm acquisition will allow OpenText to significantly raise the bar when it comes to managing content-related processes. I am not talking just about the technology but also about market presence, reputation, number of R&D engineers as well as expertise in sales and marketing.

Many business processes that customers optimize using Metastorm software do not involve content. This market is very interesting for OpenText as well. According to Gartner, the BPM market grew by 15% in 2009. Obviously, that represents a great growth opportunity for OpenText, no matter if the solutions are content-centric or process-centric. And Metastorm is a leader in BPM according to Gartner’s Magic Quadrant for Business Process Management Suites.

On top of that, Metastorm adds two other product areas to OpenText’s portfolio: business process analysis (BPA) and enterprise architecture (EA). Metastorm is a leader both areas - according to the respective Magic Quadrants. Just the fact that each of the areas has a Magic Quadrant suggests that these are separate, albeit very related, and substantial markets. And given that Metastorm is a leader in three different spaces makes it a very compelling addition to the OpenText portfolio.

A particularly interesting trend emerged in the last year or two - Case Management. Case management is a powerful way of organizing all the case-related documentation and process optimization capabilities involved in managing a case. A case can be anything from lawsuits to government grant proposals to insurance claims. And while OpenText already has had a case management offering for a couple of years, this is an area of focus today and it is likely that some of the BPM, BPA or EA capabilities from Metastorm will find their way into OpenText’s case management offering. Note: this is my take at the acquisition and not an official OpenText roadmap. Read the press release if you want the official information.

The press release discussed how Metastorm adds to OpenText’s portfolio in the Microsoft ecosystem. The ecosystem value proposition is a big part of OpenText’s strategy - the company partners with Microsoft, Oracle, and SAP and offers solutions for customers in all three of these ecosystems. And since Metastorm’s software is very friendly to the Microsoft stack and it does have existing integration with SharePoint, it is a natural fit. SharePoint is not used for process optimization today - Metastorm is a key partner of Microsoft for this purpose. This now becomes a natural addition to the portfolio of solutions we can offer to customers with significant investments in Microsoft technologies.

OpenText builds software and acquires companies to solve customer problems that relate to content. This is what we do and how we stay ahead of the curve. With all the assets and talent that Metastorm brings, this is a particularly exciting acquisition that opens up a whole new world of possibilities.

If I Was The King of Finland

I have been to most countries in Europe but I have never been to Finland. I really don’t know much about the country except for a couple of hockey players and Formula 1 drivers who speak in a flat toned voice with absolutely no emotion whatsoever. But this much I do know about Finland - I know that Nokia is from Finland. In fact, it is one of the national icons of Finland. I suspect that the CEO of Nokia is more influential in Finland than the president Tarja Halonen, even though she been a topic on the Conan O’Brian Show a few years ago.

Stephen Elop and Steve Ballmer

On Feb 11, 2011, Nokia announced the plan to adopt the Windows Phone 7 mobile operating system (MOS) on its smartphones in favor of the Symbian MOS they were using so far. This move is not a major surprise as Nokia, once the dominant leader in mobile phones, has been rapidly losing market share over the years. Also, the new Nokia CEO Stephen Elop came recently from Microsoft and since no story of Steve Ballmer throwing a chair at him appeared this time, he must have left on relatively good terms.

The move towards Windows Phone 7 is significant. It gives Microsoft a strong ally in the mobile wars which have been raging since 2007 when Apple launched the iPhone. It is definitely a great move for Microsoft which has finally started to take mobility seriously with the launch of Windows Phone 7. Microsoft’s previous attempts in mobility were lackluster at best and Microsoft needs to gain market share quickly to come at least in sight of Apple’s and Google’s taillights. Nokia will absolutely help Microsoft. But is this move the best for Nokia?

This is a tough question and if I was Stephen Elop, I would have been looking at the following options:

1. Give Symbian another push
The problem is the lack of apps on Symbian. From the app vendors point of view, Symbian is at best the number 5 mobile platform on the market, trailing behind Apple iOS, Google Android, RIM BlackBerry and Microsoft Windows Phone 7. Just getting to position 4 means beating Microsoft which is a big mountain to climb.

2. Sell out
Of course Nokia could have sold out - get acquired by another company that could afford the $35-40 bln market capitalization. Selling out is rarely the intent of a new CEO unless he or she got hired for that specific purpose. I guess we know the answer now. The possible suitors could have been Google and Microsoft as both companies attempted to sell their own devices in the past and failed. I’d argue that the merger with Microsoft is still a possibility down the road.

3. Go with Android
Nokia could have teamed up with Google and embraced the Android operating system. That would have gotten them to position 2 in mobile platform rankings which would give them instantly thousands of apps. The Android MOS is open sourced and so there is no royalty to pay to Google. The disadvantage would have been the difficulty to differentiate with Samsung, HTC and other Asian manufacturers who have already started offering Android-based phones and tablets months ago. I’ve shared my impressions about the Android-based Samsung Galaxy tablet recently.

4. Go with Microsoft Windows Phone 7
Teaming up with Microsoft was a predictable choice given Stephen Elop’s Microsoft background. This move gets Nokia to position 4 in the mobile platform rankings with a fighting chance to eclipse BlackBerry should RIM stumble with PlayBook. But that’s about it. The number 4 mobile platform is not going to get as many apps built as the top 1-2 and what they need are apps, apps, and apps. With Microsoft, Nokia found a powerful marketing ally but Windows Phone 7 isn’t open sourced and Nokia will have to pay royalties to Microsoft. Also, differentiation is not a slam dunk since Samsung, HTC and other manufacturers already ship Microsoft-based phones.

I’ve also considered a scenario of Nokia merging with RIM and embracing the BlackBerry OS but since the companies have virtually equal market capitalization, I have dismissed this scenario as a viable option.

Stephen Elop, Nokia's CEO

Obviously, Stephen Elop has opted to go with Microsoft and take advantage of a powerful and motivated ally with the risk that even this combination might not succeed to win over application vendors. And even if that battle succeeds, Nokia will have difficulty to differentiate. Within 12 months, all the devices will have every bell and whistle and with the same OS and the same apps available, the battle will be probably fought on price. And that’s not an enviable position to be in.

The reality is that Nokia had to make a move and the new situation is decisively better than the situation before. Possibly, Nokia might end up licensing Android in addition to Windows Phone 7 just like Samsung and HTC do. Or they might sell out after all - most likely to Microsoft. In either case, both companies have their work cut out. 

Images: Courtesy of Nokia