Analyst: Microsoft Should Split Into Three Different Companies

Microsoft Campus

Splitting up seems to be all the rage at the moment. Former Microsoft CEO Steve Ballmer kicked off a companywide reorganization plan last year and asked for a new approach.

A new approach that puts the focus on devices and services.

His successor, Satya Nadella wants the company to become a mobile first, cloud first company. And this is just his own twist on the devices and services approach, just with a little more focus on the cloud side of the business.

However, when it comes to business, there are some that think that Redmond is currently involved in three distinctly different markets — software, hardware and enterprise.

Since these ventures overlap each other, it would be better for Microsoft to split up.

These are the words of Colin Gillis, a technology analyst at BCG Financial, who explained in a note to investors that the recent example from HP could be put to use here, and Microsoft can be divided into three different business, each operating independently:

“Given the recent announcement of HP’s plan to split into two different businesses in a tax-free manner, it raises the issue that if Microsoft is unable to generate meaningful hardware sales, or reignite the PC market, that shareholder(s) may best be served by the company splitting into three businesses: hardware, software, and enterprise services.”

All three units would focus on their own projects, generate their own sales, with the ultimate result being that Microsoft will be able to reduce losses while boosting specific sides of the business.

Strong opinion, but we all know that Nadella wants one, single Microsoft.

The new CEO is working towards the One Windows strategy, which should become much more visible next year after Windows 10 launches. Interestingly, Nadella is also projecting Redmond towards a more consumer orient approach.

These talks of a split up, are just that, then. Talks.

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