Microsoft: With a move to a Windows ecosystem strategy the prospects for the Phone Hardware segment are below original expectations, so the full cost of the Nokia Devices and Services acquisition is written off now + Changes to the mapping business + Selling display advertisement via AOL + Expansion of programmatic advertising via AppNexus

IMPORTANT: This does not mean that Microsoft is exiting the phone business. Not even in the sense of manufacturing. Just the opposite is true. In my June 23 – December 20, 2013 post I was quessing whether Nokia becoming the next Samsung from its new Vietnamese manufacturing base? And now this guessing is closer to the truth than ever.

Just change the name “Nokia” to “Microsoft” as that $300M plant investment has been kept by the company. Then with the February 25, 2015 information that Microsoft to cut 9,000 Nokia jobs in China (which was part of an estimated 18,000 job cuts already announced in the wake of  purchase of the Nokia unit for $7.2 billion by Microsoft) the plant in Vietnam became even more important because of “Microsoft … scheduled the closure of the plants — located in Beijing and the southeastern city of Dongguan — earlier this month and plans to ship some of the manufacturing equipment there to Vietnam.

And indeed AT&T now [June 26] selling the Lumia 640 XL for $249.99 without a contract which IMHO is the best value for the money on the market by far. It is already manufactured in Vietnam, and already corresponds to the new “Windows ecosystem strategy” announced just today and available below. The 640 XL has been clearly designed for one of the three phone customer segments targeted by the strategy: thevalue phone buyers“. In addition Vietnam’s new POLICY OPENS DOOR TO HI-TECH INVESTORS  which will enable to expand from that manufacturing base as much as only will be allowed by the market circumstances.

Finally Microsoft has placed ads during the last month for not less than 31 highly paid senior jobs in the international LinkedIn media alone for its manufacturing operation in Vietnam. These ads generally are talking about the:

Microsoft Mobile Devices and Services (MMDS) Group [which with the announcement given below is now part of the Windows and Devices Group led by Terry Myerson, the previous Windows chief] have always believed in the transformative power of technology. From the initial vision of placing a personal computer on every desktop and in every home, to putting mobile devices into a billion hands, we have connected and empowered generations. We want to make the lives of billions of people better in fundamental ways – that’s what we do today, and that’s what we’ll do tomorrow.

So as far as the phone hardware business is concerned everything is poised to grow after cutting off the whole unnecessary weight which came with Nokia acquisition a year ago.

Additional readings/information:

DETAILS

July 8, 2015: Microsoft announces restructuring of phone hardware business By Microsoft News Center

REDMOND, Wash. —  Microsoft Corp. today announced plans to restructure the company’s phone hardware business to better focus and align resources. Microsoft also announced the reduction of up to 7,800 positions, primarily in the phone business. As a result, the company will record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of approximately $750 million to $850 million.

Today’s announcement follows recent moves by Microsoft to better align with company priorities, including recent changes to Microsoft’s engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and shifts in Microsoft’s display advertising business that enable the company to further invest in search as its core advertising technology and service.

Today’s plans were outlined in an email from Microsoft CEO Satya Nadella to Microsoft employees.

“We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family,” Nadella said. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”

Microsoft will record a charge in the fourth quarter of fiscal 2015 for the impairment of assets and goodwill in its Phone Hardware segment, related to the NDS business. This charge has no impact on cash flow from operations and is nondeductible for income tax purposes.

Based on the new plans, the future prospects for the Phone Hardware segment are below original expectations. Accordingly, the company concluded that an impairment adjustment of its Phone Hardware segment assets and goodwill of approximately $7.6 billion is required.

The actions associated with today’s announcement are expected to be substantially complete by the end of the calendar year and fully completed by the end of the company’s fiscal year.

More information about these charges will be provided in Microsoft’s fourth-quarter earnings announcement on July 21, 2015, and in the company’s 2015 Annual Report on Form 10-K.

email from … ⇒ July 8, 2015: Satya Nadella email to employees on sharpening business focus By Microsoft News Center

Team,

Over the past few weeks, I’ve shared with you our mission, strategy, structure and culture. Today, I want to discuss our plans to focus our talent and investments in areas where we have differentiation and potential for growth, as well as how we’ll partner to drive better scale and results. In all we do, we will take a long-term view and build deep technical capability that allows us to innovate in the future.

With that context, I want to update you on decisions impacting our phone business and share more on last week’s mapping and display advertising announcements.

We anticipate that these changes, in addition to other headcount alignment changes, will result in the reduction of up to 7,800 positions globally, primarily in our phone business. We expect that the reductions will take place over the next several months.

I don’t take changes in plans like these lightly, given that they affect the lives of people who have made an impact at Microsoft. We are deeply committed to helping our team members through these transitions.

Phones. Today, we announced a fundamental restructuring of our phone business. As a result, the company will take an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services business in addition to a restructuring charge of approximately $750 million to $850 million.

I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.

In the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly. Our reinvention will be centered on creating mobility of experiences across the entire device family including phones.

Mapping. Last week, we announced changes to our mapping business and transferred some of our imagery acquisition operations to Uber. We will continue to source base mapping data and imagery from partners. This allows us to focus our efforts on delivering great map products such as Bing Maps, Maps app for Windows and our Bing Maps for Enterprise APIs.

Advertising. We also announced our decision to sharpen our focus in advertising platform technology and concentrate on search, while we partner with AOL and AppNexus for display. Bing will now power search and search advertising across the AOL portfolio of sites, in addition to the partnerships we already have with Yahoo!, Amazon and Apple. Concentrating on search will help us further accelerate the progress we’ve been making over the past six years. Last year Bing grew to 20 percent query share in the U.S. while growing our search advertising revenue 28 percent over the past 12 months. We view search technology as core to our efforts spanning Bing.com, Cortana, Office 365, Windows 10 and Azure services.

I deeply appreciate all of the ideas and hard work of everyone involved in these businesses, and I want to reiterate my commitment to helping each individual impacted.

I know many of you have questions about these changes. I will host an employee Q&A tomorrow to share more, and I hope you can join me.

Satya

recent changes ⇒ June 17, 2015: Microsoft aligns engineering teams to strategy By Microsoft News Center 

REDMOND, Wash. — June 17, 2015 — In an email to employees Wednesday, Microsoft Corp. announced changes to its Senior Leadership Team to drive engineering alignment against the company’s core ambitions: reinvent productivity and business processes, build the intelligent cloud platform, and create more personal computing.

“We are aligning our engineering efforts and capabilities to deliver on our strategy and, in particular, our three core ambitions,” said Satya Nadella, CEO of Microsoft. “This change will enable us to deliver better products and services that our customers love at a more rapid pace.”

Changes to the Senior Leadership Team include the following:

Executive Vice President Terry Myerson will lead a newly formed team, Windows and Devices Group (WDG), focused on enabling more personal computing experiences powered by the Windows ecosystem. This new team combines the engineering efforts of the current Operating Systems Group and Microsoft Devices Group.

Executive Vice President Scott Guthrie will continue to lead the Cloud and Enterprise (C+E) team focused on building the intelligent cloud platform that powers any application on any device. The C+E team will also focus on building high-value infrastructure and business services that are key to managing business processes, especially in the areas of data and analytics, security and management, and development tools. As a part of this announcement, the company will move the Dynamics development teams to the C+E team, enabling the company to accelerate ERP and CRM work and bring it into the mainstream C+E engineering and innovation efforts.

Executive Vice President Qi Lu will continue to lead the Applications and Services Group (ASG) focused on reinventing productivity services for digital work that span all devices and appeal to the people who use technology at work and in their personal lives.

As a result of the organizational moves, Stephen Elop, Kirill Tatarinov and Eric Rudder will leave Microsoft after a designated transition period. Unrelated to the engineering restructuring changes, Chief Insights Officer Mark Penn has decided to pursue another venture outside Microsoft and will be leaving the company in September.

Following these changes, Microsoft’s Senior Leadership Team totals 12 executives:

  • Satya Nadella, Chief Executive Officer
  • Chris Capossela, Executive Vice President and Chief Marketing Officer
  • Kurt DelBene, Executive Vice President, Corporate Strategy and Planning
  • Scott Guthrie, Executive Vice President, Cloud and Enterprise
  • Amy Hood, Executive Vice President and Chief Financial Officer
  • Kathleen Hogan, Executive Vice President, Human Resources
  • Peggy Johnson, Executive Vice President, Business Development
  • Qi Lu, Executive Vice President, Applications and Services Group
  • Terry Myerson, Executive Vice President, Windows and Devices Group
  • Harry Shum, Executive Vice President, Technology and Research
  • Brad Smith, Executive Vice President and General Counsel, Legal and Corporate Affairs
  • Kevin Turner, Chief Operating Officer

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world and is focused on empowering every person and every organization on the planet to achieve more.

June 17, 2015: Satya Nadella email to employees on aligning engineering to strategy By Microsoft News Center 

From: Satya Nadella
To: All Employees
Date: June 17, 2015
Subject: Aligning Our Strategy & Structure

Team,

As we approach a new fiscal year, I’d like to share with you how we are aligning our structure to our strategy and the changes to our Senior Leadership Team.

Over the past year, I have said that Microsoft aspires to empower every person and every organization on the planet to achieve more. To do this, building the best-in-class productivity services and platforms for the mobile-first, cloud-first world is at the heart of our strategy, with three interconnected and bold ambitions:

  • Reinvent productivity and business processes
  • Build the intelligent cloud platform
  • Create more personal computing

To better align our capabilities and, ultimately, deliver better products and services our customers love at a more rapid pace, I have decided to organize our engineering effort into three groups that work together to deliver on our strategy and ambitions. The changes take effect today.

  • Terry Myerson will lead a new team, Windows and Devices Group (WDG), enabling our vision of a more personal computing experience powered by the Windows ecosystem. We will combine the engineering efforts of our current Operating Systems Group and Microsoft Devices Group (MDG) led by Stephen Elop. This new team brings together all the engineering capability required to drive breakthrough innovations that will propel the Windows ecosystem forward. WDG will drive Windows as a service across devices of all types and build all of our Microsoft devices including Surface, HoloLens, Lumia, Surface Hub, Band and Xbox. This enables us to create new categories while generating enthusiasm and demand for Windows broadly.
  • Scott Guthrie will continue to lead the Cloud and Enterprise (C+E) team focused on building the intelligent cloud platform that powers any application on any device. The C+E team will also focus on building high-value infrastructure and business services that are unique to enterprise customers, such as data and analytics products, security and management offerings, and business processes. Today, we are also moving the development teams who build ourDynamics products to C+E, which will enable us to accelerate our ERP and CRM work even further and mainstream them as part of our core engineering and innovation efforts. C+E will work closely with ASG to ensure the end-to-end experience is cohesive across communications, collaboration and business processes.
  • Qi Lu will continue to lead the Applications and Services Group (ASG) that is focused on reinventing productivity. This group is leading the charge in building productivity services for digital work that span all devices and appeal to the people who use technology at work and in their personal lives. ASG has already made advancements in these areas, and the only change as part of today’s announcement is that the engineering efforts to build solutions for Educationwill move to ASG.

Changes of this nature require us to look at our leadership structure overall, and as a result a few Senior Leadership Team members will leave Microsoft at the conclusion of a transition period.

When Stephen Elop returned to Microsoft, he oriented MDG to create the best Microsoft experience through its devices, inclusive of hardware, software and services. He has been a strong advocate of the need to drive focus and accountability around the delivery of these experiences and has helped drive tighter alignment toward the ambition of more personal computing. With the structural change described above, Stephen and I have agreed that now is the right time for him to retire from Microsoft. I regret the loss of leadership that this represents, and look forward to seeing where his next destination will be.

Kirill Tatarinov is going to explore what’s next for him. Under Kirill’s leadership, the Dynamics business has grown to a nearly $2 billion business with an ambitious wave of products on the horizon. Perhaps most important though, Kirill and team have shown us that participating in a meaningful way in the CRM and ERP market opens up new opportunities we can uniquely take advantage of by bringing Dynamics into Microsoft’s mainstream engineering, sales and marketing efforts. I am very thankful for Kirill’s unswerving leadership in bringing Dynamics to this point and building a strong leadership team to carry it forward.

After more than 25 years at Microsoft, Eric Rudder has decided to try something new. Eric has played a number of key roles at Microsoft including founding and growing the Server and Tools business in its early days, leading Microsoft Research, and most recently driving our advanced technology and education efforts. I will deeply miss Eric’s passion, technical and business acumen, and keen intellect, and I appreciate all he’s done for Microsoft.

Lastly, a number of months ago, Mark Penn shared with me that he is planning to leave Microsoft in September to form a private equity fund, among other things. Over the years, Mark has leveraged his talents and insights on Microsoft’s behalf. From helping craft a Super Bowl ad and helping design new business and marketing models to his work in data analytics, Mark has helped me set the company on a new course. I’m thankful for the wise strategic counsel Mark has provided, and I look forward to seeing what he does next.

I’ve worked closely with Stephen, Eric, Kirill and Mark and have incredible respect for each of them and wish them well.

I’m counting on our Senior Leadership Team to inspire innovative products and services and lead excellent execution. Our competition and our customers don’t care about our organization structure — they care about innovation. While we are distinctly aligning our engineering structure and core capabilities, our ambitions are interconnected. Success requires all of us — and particularly the Senior Leadership Team — to work across boundaries as one Microsoft and in harmony with our partners. Here’s the new team effective today:

  • Chris Capossela, Executive Vice President and Chief Marketing Officer (will now also take on responsibility for Dynamics and Education marketing)
  • Kurt DelBene, Executive Vice President, Corporate Strategy and Planning
  • Scott Guthrie, Executive Vice President, Cloud and Enterprise
  • Amy Hood, Executive Vice President and Chief Financial Officer
  • Kathleen Hogan, Executive Vice President, Human Resources
  • Peggy Johnson, Executive Vice President, Business Development (will now lead our partnerships with mobile operators around the world)
  • Qi Lu, Executive Vice President, Applications and Services Group
  • Terry Myerson, Executive Vice President, Windows and Devices Group
  • Harry Shum, Executive Vice President, Technology and Research
  • Brad Smith, Executive Vice President and General Counsel, Legal and Corporate Affairs
  • Kevin Turner, Chief Operating Officer (will also now take responsibility for the Dynamics sales and partner organization)
  • Jill Tracie, Chief of Staff

I’m certain that matching our structure to our strategy will best position us to build products and services our customers love and ultimately drive new growth. Please feel free to send any questions you have to one of the Senior Leadership Team members or me.

Looking forward to what we can do together.

Satya

shifts ⇒ June 29, 2015: Microsoft expands partnerships with AOL and AppNexus, Bing to power search for AOL properties by Rik van der Kooi, Microsoft corporate vice president of advertising and consumer monetization, and Frank Holland, Microsoft corporate vice president of A&O on the Microsoft Fire Hose blog

Today we are announcing new levels of partnership with both AOL and AppNexus.

Bing will now power search and search advertising across the AOL portfolio of sites. This 10-year agreement will enable AOL users to have access to world-class search powered by Bing across the company’s global portfolio of sites. Now with 20 percent organic market share in the U.S., Bing continues to grow organically as well as through key partnerships like the one with AOL. This deal with AOL is the latest to validate the quality of Bing results and the performance of the Bing Ads marketplace. Bing is also an integral part of popular first- and third-party devices and services.

In addition to the search partnership, AOL will become our seller of all display formats, including mobile and video, for the Microsoft portfolio across nine markets (Brazil, Canada, France, Germany, Italy, Japan, Spain, United Kingdom and the United States).

Microsoft and AOL share a commitment to customer service and collaboration, and together we will create a powerhouse media offering with a remarkable set of differentiated assets. By introducing one selling motion across AOL’s world class portfolio of sites, such as Huffington Post, Engadget, Adap.tv and TechCrunch and Microsoft’s much-loved consumer services, including MSN, Xbox, Outlook.com, and Skype, we are uniquely positioned to deliver more scale of premium inventory and target audiences across display, video and mobile. Our advertising customers will have one consistent experience as we transition our sales and trade marketing employees in these nine markets to AOL, subject to compliance with local law and employee consultation obligations.

With our expanded AppNexus partnership, they will become our exclusive programmatic technology and sales partner in 10 markets (Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden and Switzerland). Business in these markets will transfer over the coming months, subject to compliance with local law.

Today, AppNexus is the lead technology partner for our programmatic business, across 39 different markets around the world. Last year, we started a pilot program in the Nordic countries to take those markets to a fully programmatic sales motion. We feel very good about the results – more than 50 percent of business in these markets today is programmatic and we’re taking that to the next level with today’s announcement across the 10 markets. The expansion of our partnership will give advertisers programmatic access to more supply of premium, brand-safe Microsoft inventory, while simplifying the buying process and capturing the momentum of explosive programmatic growth in the industry.

Today’s news is evidence of Microsoft’s increased focus on our strengths: in this case, search and search advertising and building great content and consumer services. The evolution in our approach to display advertising allows us to keep this focus, while working with industry leaders to market our services. We remain as committed today as we have been in the past decade to digital advertising and its effectiveness in delivering free services to consumers worldwide.

Posted by Jennifer Chen
Microsoft News Center Staff

June 30: AppNexus and Microsoft Announce Multi-Year Extension and Expansion of Technology Partnership By AppNexus PRESS RELEASES

–New York – June 30, 2015 – AppNexus, the world’s leading independent ad tech company, today announced an agreement to extend and expand its global technology partnership with Microsoft. The deal creates a multi-year extension of the Microsoft-AppNexus engagement, expanding AppNexus’ role as Microsoft’s exclusive partner for programmatic technology and sales in ten markets. In total, AppNexus powers Microsoft’s programmatic advertising today in over 39 markets.

The expanded engagement builds on a highly successful pilot program in the Nordic region, where AppNexus helped to convert almost 50 percent of Microsoft’s advertising operations to programmatic within six months.

“We are thrilled to extend and expand our strategic global partnership with Microsoft,” said Michael Rubenstein, president of AppNexus. “Over the past five years, we have jointly introduced remarkable innovation into the digital advertising marketplace. We look forward to building on this highly successful collaboration to bring more leading-edge advertising technology to market in such areas as mobile and video, automated guaranteed and private marketplaces, holistic yield management, and much more.”

Today’s agreement names AppNexus as Microsoft’s technology and programmatic sales partner in Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden and Switzerland.

“AppNexus has been and continues to be a trusted strategic partner, working with us in 39 markets around the world today as the lead technology partner for our programmatic business,” said Rik van der Kooi, Corporate Vice President, Microsoft. “We are expanding our partnership in 10 of these markets to give advertisers access to more supply of premium, brand-safe Microsoft inventory programmatically, while simplifying the buying process and capturing the momentum of explosive programmatic growth in the industry.”

ABOUT APPNEXUS

AppNexus is a technology company whose cloud-based software platform enables and optimizes programmatic online advertising. Its enterprise technology platform maximizes yield and campaign performance for sellers and buyers of online inventory. As the world’s leading independent ad tech company, AppNexus is led by the pioneers of the web’s original ad exchanges. Headquartered in New York City with 23 global offices, AppNexus employs more than 900 of the brightest minds in advertising and technology who believe that advertising powers the Internet. For more information, follow us at @AppNexus or visit us at www.AppNexus.com.

“The term programmatic media (also known as programmatic marketing or programmatic advertising) encompasses an array of technologies that automate the buying, placement, and optimisation of media inventory, in turn replacing human-based methods.[1] In this process, supply and demand partners utilise automated systems and business rules to place advertisements in electronically targeted media inventory.[2] It has been suggested that programmatic media is a fast-growing phenomenon in the global media and advertising industry.[3]
Source: Programmatic media, Wikipedia article

More information:
June 5, 2014: Why and how ‘programmatic’ is emerging as key to real-time marketing success (PDF) By AppNexus

About Nacsa Sándor

Lazure Kft. • infokommunikációs felhő szakértés • high-tech marketing • elérhetőség: snacsa@live.com Okleveles villamos és automatizálási mérnök (1971) Munkahelyek: Microsoft, EMC, Compaq és Digital veterán. Korábban magyar cégek (GDS Szoftver, Computrend, SzáMOK, OLAJTERV). Jelenleg Lazure Kft. Amire szakmailag büszke vagyok (időrendben visszafelé): – Microsoft .NET 1.0 … .NET 3.5 és Visual Studio Team System bevezetések Magyarországon (2000 — 2008) – Digital Alpha technológia vezető adatközponti és vállalati szerver platformmá tétele (másokkal együttes csapat tagjaként) Magyarországon (1993 — 1998) – Koncepcionális modellezés (ma használatos elnevezéssel: domain-driven design) az objektum-orientált programozással kombinált módon (1985 — 1993) – Poszt-graduális képzés a miniszámítógépes szoftverfejlesztés, konkurrens (párhuzamos) programozás és más témákban (1973 — 1984) Az utóbbi időben általam művelt területek: ld. lazure2.wordpress.com (Experiencing the Cloud) – Predictive strategies based on the cyclical nature of the ICT development (also based on my previous findings during the period of 1978 — 1990) – User Experience Design for the Cloud – Marketing Communications based on the Cloud
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