Hardware may be getting harder

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(Source: Stockfresh)

There were more than a few interesting news stories this week, not least of which was the fact that a couple seem to directly support my albeit simplistic assertion that the IT hardware business is a hard business.

First of all, there was the story that Larry Ellison no longer perceives IBM and SAP as Oracle’s chief rivals but now single out agile cloud service companies as the next challengers.  Again, this stance seems to de-emphasise hardware and focus on the services that are possible with new delivery vehicles.

But more so was the offloading by Google of Motorola to Lenovo. This seems further strengthening of the idea that producing cutting edge IT hardware, especially in the white heat of the consumer world, is not an easy task.

Indeed, the wags over at The Register have questioned Lenovo’s decision, wondering if its ambitions to make a smart phone line that will appeal in Europe and the US is really further by buying Motorola.

Further grist to the mill is news that IBM may be dumping its early foray into software define networking, which, OK, isn’t really hardware as such, but again is an insight into the fact that Big Blue sees itself moving ever further up the value chain and further from the fabric layers on which it sees its lucrative service business resting.

So, in the midst of this came the rumour that Microsoft may well be at the end of its search for a new CEO, a process which may also result in a new chairman of the board too.

A report from Bloomberg, which we covered here, suggests that Satya Nadella is about to be named CEO and that Bill Gates may well be replaced as chairman too. So that would be Ballmer and Gates gone in one fell swoop.

Now, it has been theorised more than once that the choice of Nadella as CEO would seem to indicate that Microsoft is revealing its potential future emphasis by going with someone of Nadella’s strengths.

An Indian born engineer who has been with the company since 1992, Nadella would be seen very much as the tech visionary type of character, but with real delivery pedigree as he was instrumental in delivering some of Redmond’s key online strategies, such as turning Windows Live search into Bing (now capturing nearly a fifth of the search market, according to recent filings).

Currently serving as chief of all things cloud for Microsoft, Nadella would be seen as being at the forefront of current trends in cloud and enjoys reflective glory in the growing success of Windows Azure and Office 365.

What Nadella is not perceived to have in any great measure is an affinity for the Xbox and consumer side of the business, nor does he have any CEO-type experience.

All of this would lead one to conclude that despite Ballmer’s transformation of Microsoft toward a devices and services company, Nadella may have, I’d argue, an altogether more Apotheker-like agenda, if he is let.

Will we see Microsoft split up to be Microsoft Entertainment and Microsoft Enterprise? Will the search and consumer divisions be sold off or hived off? Will Microsoft go the IBM route and look to be at the forefront of service delivery to enterprise from a cloud base?

It remains to be seen, but the original assertion remains as true as ever: IT hardware is a hard business.

Read More: Blog hardware IBM Lenovo Microsoft Paul Hearns