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.

Please Leave Your Comments Below...

  • Fahad Ali

    Gotta say, this is quite an archaic way of thinking, and not what modern computing is about. Can’t see Microsoft going this route, really.

    Even with the pressures it is facing from (some) investors.

    • Black Eagle

      I agree with you. It wouldn’t benefit anyone. I think it’s the analyst and shareholders short term goal to make money.

      • Fahad Ali

        Hawks, as some call them.

        If Apple and Google can function as one, so can Microsoft. Though I’ll admit a few management changes are still needed at Redmond, there’s always room for improvement.

        • Black Eagle

          Yes. Very true. Splitting up would harm the company. Yes. I think they are in the process of making changes still.

  • Ray C

    These analyst are ridiculous. Every time you turn around they’re saying something that contradicts, something they’ve already said

    • Fahad Ali

      That’s how they (try to) form opinions, I guess.

  • Mike Greenway

    Everyone is entitled to an opinion. Combine that with free speech, the internet and too much drug consumption and here we go, again.