Google Closes Motorola Mobility Deal; Nothing Different Happens

OK, it’s official: Google formally owns Motorola Mobility (MoMo). Now what?

Here’s what we had to say in August 2011 about the situation:

While the deal provides Google with substantial benefits, it is a very dangerous path for Google to embark upon;
The deal opens doors for HP and Microsoft, and throws both Microsoft and Nokia a mobile-market lifeline, and
The mobile market will not see significant impact from this deal for at least another year.

We’ve heard from a handful of journalists and clients about this, asking what we think. Frankly, we don’t see how our original position should be changed.

The danger still lies mostly in the opportunity/temptation for Google to treat MoMo with some level of preference as regards Android OS development, licensing, insights, input, and so on. Sure, temptations and conflicts like this can be managed, but as we said last year:

“The biggest friction point is this: Google just became a hardware vendor for its own operating system. That is a huge conflict of interest for any vendor, and one not easily managed throughout the last 20-plus years of IT history.”

Let’s also not forget that Google started coming down hard on Android licensees last year for real or perceived violations/deviations from Google’s vision of what Android should and will be. There is already some resentment and discomfort brewing in the extended Android community. The Google+MoMo relationship in this mix is akin to a CEO adopting one of his less-than-productive section managers. It is at best an extremely difficult situation to manage, and nearly impossible to avoid any perception, let alone occurrence, of favoritism or nepotism.

And, to revisit our August 2011 position again, “Google has not shown itself to be adept at hardware marketing, sales and support. And its decentralized, try-anything, beta-everywhere approach has hurt it in many commercial IT (enterprise and otherwise), markets, including mobility.” We don’t see much that has changed enough to make us reconsider that statement, either. Our biggest concern for Google is that they will naturally use MoMo as an in-house alpha/beta test environment for Android – not favoring MoMo with early releases or licensing terms in any way, but using it as a “model home” to showcase what’s coming and what’s possible with Android, which could provide MoMo with a perceived advantage over other Android device makers. It is at best a slippery slope to negotiate; bringing in new CEO Dennis Woodside, who excels at negotiating advertising partnerships but lacks technology or mobility provider market experience, does not make this easier for Google or MoMo itself.

So, continuing the “what we said is still what we say” theme to the end, we still think the Google+MoMo deal helps Microsoft, for the reasons stated last August:

“Microsoft...just became much more attractive to more mobile device makers. If they can make Windows Phone 7 a success with Nokia, then at least some of the mobility vendors currently emphasizing Android will look to expand their OS and developer partnerships.
“Finally, we see this deal reducing overall smartphone competition, despite what Google has stated. Three major smartphone operating systems exist today: Android, iOS, and BlackBerry OS. ... With the Motorola deal, all three “majors” will be directly controlled by a mobile device vendor...only Microsoft’s Windows Phone 7 will be the remaining, lone, “independent” mobile OS of consequence.”

What’s changed since last year? HP killed WebOS and Palm devices, removing that potential competition from mobile OS and device markets. So now, it’s the independent Microsoft versus the co-dependent Google+MoMo, the vertically-integrated Apple, and the souring Blackberry.

Microsoft has little hope of unseating or even disrupting Apple at this point. But as the enterprise buyers rethink their Blackberry commitments, Microsoft – with an integrative mobile+desktop approach and unmatched channel strength – can quickly become #3 in smartphone OS and development ecosystem position - and in a much stronger, device-independent position from which to challenge Google/Android.

Bruce Guptill

Most research firms can explain what happened; some can explain what is happening. Saugatuck Technology excels at understanding both in order to explain what else is likely to occur, and to guide its clients toward the actions that deliver them the greatest business value while enabling the safest business path.
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Guptill’s own technology and business background laid a solid foundation for such a flexible, yet stable, approach to IT research value for clients. His technology research work includes mobility, collaborative IT, telecom, data networking, web commerce, and electronic marketplaces; his research work for enterprise IT and business clients includes return on IT investment, total cost of IT ownership, and business planning for IT. His research and guidance on vendor channel management, market identification and development, and buyer behavior analysis has enabled hundreds of established and startup IT providers to find, enter, and profit from new and traditional markets, while helping to guide user enterprise leaders toward optimal IT procurement and vendor management.
Guptill’s research background includes several years as a VP and research director with Gartner, senior positions with TeleChoice and Robert Frances Group, and editorial work within the IDG companies, including four years as a writer and editor with NetworkWorld. His marketing business focus was honed as VP of marketing for firms ranging from custom development providers to non-IT firms in aviation and other industries. His sales and channel experience started by traveling with a sample bag, then working for IT VARs, then advising telecom and wireless carriers on partner choices, to developing partner programs for traditional and Cloud-based software development firms and ISVs.
Guptill holds an MBA in marketing and finance, and a BA in the psychology and business of mass media communication. He is licensed to fly airplanes, drive boats, and sell houses; he is also a certified baseball coach, serves on the boards of regional civic groups, and is a serial home renovator. Married with three children, Guptill resides on Cape Cod in southeastern Massachusetts, and is a lifelong fan of the Red Sox, Patriots, Celtics, and the University of Connecticut Huskies.

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