earlier post on Google+, though, there are a lot of moving parts to this deal. Certainly defense for the patent wars was paramount, as Android device platforms were getting nervous and taking it on the chin with lawsuits from Microsoft, Apple and others. Ironically, even Motorola itself was feeling the heat and is due in court next week to launch its own Android defense.
But in the protection racket that has become patent law, Google's acquisition of Motorola was about more than just engineering a twenty-fold increase in its held and pending patents. With Motorola struggling to keep up with Samsung, HTC and others in the mobile wars, there was a real danger that Motorola would have fallen into the hands of a competitor like Microsoft. Microsoft may claim "we just do the software," but its strong position with Nokia and its continuing push to transform home markets via its Xbox game controllers and Kinect 3-D sensor controllers underscores a mixed hardware/software strategy for controlling its markets. Having Motorola as a Nokia-like partner for U.S-centric markets and Nokia for overseas markets would have been a strong plus for Microsoft, with patent suits a heavy stick to make the carrot of partnership look sweeter. So a Motorola Mobility acquisition will help Google to stall Microsoft on a number of fronts - including home entertainment.
Many analysts have glanced over Motorola Mobility's cable modem and home cordless phone businesses as important parts of this acquisition. It may not be the most important component in its holdings, but it shouldn't be overlooked. Google is about to go to war itself with its pending relaunch of Google TV, taking on in earnest both settop box suppliers and cable content distributors, as well as game console suppliers like Nintendo and Microsoft. Cable operators know that their last real line of defense against the Web is their control of the content access point. If a cable modem unit had Google TV loaded on it, including, say, Google Voice, Gtalk video and voice and Google+'s new Hangout group video service, then many cable operators' combo packages for TV content, phone service and Web service would have a new frenemy with which to contend.
I doubt that Google will confront cable operators via Motorola modem units in the short term, But don't be surprised if Google's pilot ultra-high-speed internet access projects broaden in scope and add "White-Fi" Web access components in rural areas via radio communications using the newly approved 802.22 WRAN standards for the former UHF TV frequencies that Google fought for a few years ago. At that point of inflection, having Motorola units available to take advantage of these types of Web-first services for Web, phone and video communications in homes and businesses might look a little more appealing.
Will Google's Android partners balk at the Motorola partnership and fall into forced love of Microsoft? Possibly, but then again, looking at the flop that was HP's launch of WebOS phones, a perfectly good mobile OS launched two years too late, would they want to bet the farm on an attractive but also-ran Windows Phone 7? It's more likely that Google eases the mobile phone portion of Motorola into a specialized role that allows them to keep pressure on its partners to enable Google's own innovations to get to market more quickly via Android on their phones. Android covers a very broad range of price points, including $80 smart phones now sold in Africa, so their overall strategy is far too broad to be accomplished with only Motorola in tow.
Speaking of HP, how's that restructuring grabbing you? Part two of this week's tech train wreck sees the remnants of Carly Fiorina's acquisition of Compaq computers finally hitting the wall, along with HP's more recent $1.2 acquisition of Palm mobile devices. Ostensibly it was the miserable flop of HP's TouchPad WebOS tablets - now being blown out at $99 a pop clearance prices - that triggered the company's management abandoning its enormous but challenged consumer PC and mobile business. No developers' support for WebOS apps, tepid hardware and a host of other problems could be blamed for this decision, but the larger problem is that WebOS didn't encompass HP's PCs. With a split-screen OS strategy, HP was challenged to differentiate itself in an integrated way across a broad array of consumer computing platforms as Apple, Google and Microsoft can do.
So it's off to the dust bin for the consumer computer/mobile bits of HP, while they hope that a pending acquisition of Autonomy, a leading enterprise search and content harvesting platform, will complement their well-established line of enterprise server computers and support. It's a "Big Data" strategy that could work out pretty well in the long run, but right now it's not clear how much of a long run there is for enterprise computing. As more and more I.T. functions get trucked out to cloud computing services, the big question is what will remain inside the enterprise outside of very core information services. Big Data is about analysis more than it is about owning data, so the Autonomy acquisition could help HP to finesse the cloud transition.
But it's not clear that HP's existing enterprise infrastructure is enough to supercharge Autonomy sales, or vice versa. It's kind of a throwback strategy, like DEC's attempt to muscle its way into the search game with its relatively primitive Alta Vista riding on souped-up DEC server hardware. I'm not saying that it doesn't make sense - Google's cloud search services for the Web and enterprises run on their own "special sauce" hardware-software combos - but it will require extremely impressive performance to sell as either a cloud service or an installed enterprise service. That may take a while to cook up to truly competitive standards. In the meantime IBM, Microsoft, Oracle, EMC and many others will be setting their crosshairs on HP's enterprise I.T. ambitions. It might begin to make consumer computing look like a cakewalk.
What missing in the midst of both of these rather messy strategies is a core mission statement that people can grab on to. For Google, coming up with such a statement may be a little easier, since there were some immediate problems that needed to be addressed. But getting in to the hardware business is a huge step, one which requires levels of customer service that Google has never achieved on the software side. Google promises that it will run Motorola as a separate company, and for the sake of service issues it may have to. Making all of these parts sing in an integrated strategy will be a challenge. S&P's downgrade of Google's stock is a reflection of a risky long-term strategy that has many strong components but which will require a good deal of selling to both the public and institutional investors.
For HP, the issue of a core mission is much broader and deeper. In the process of giving up an unglamourous cash cow PC business and a failed mobile business, HP is left with yet another round of demoralizing "what are we in business for, anyway?" question that it must answer for both its staff and its clients. HP has been victimized by a series of management regimes that featured CEOs with clear visions of what they wanted HP to do, but rather muddled visions of what HP actually stood for. Its key sources of innovation in printers aren't enough to power an innovation vision for the full breadth of its holdings. Its innovation in mobile came by way of its Palm acquisition. HP needs to answer definitely the specific purposes that makes them the "go-to" company for something. Anything. Otherwise, like many of today's major media companies, they're just a holding company for tired old bits of strategies that bean-counters push around for quarterly returns.
If this messy train wreck is the official beginning of the often-heralded Post-PC Era, then it's not an auspicious start for major U.S. tech companies. In spite of Google's presence as an increasingly viable alternative to Microsoft for enterprise and consumer devices, they have spurned taking chances and have thus fallen into the bumpy remains of Microsoft's old strategies and it efforts towards cloud computing reinvention. The net winner in all of this mess in the short run is Apple, which has a well-integrated line of products and services across a wide array of successful consumer platforms that are eating away at the edges of enterprise computing.
The conventional wisdom of the moment says that you need both hardware and software to succeed today in computing markets. I think that this meme is highly overblown, given the presence of Linux on most Web servers, Android's enormous success on mobile phones across the globe, and Chrome OS' promising growth. But if you're not owning the stack, then you have to pick the most agile and innovative software and hardware partners. Many U.S. tech companies decided that armies of lawyers and M&A specialists were more important than innovation for too long, and now they're paying the price. IBM also comes out a winner, having spun off consumer PCs seven years ago to re-focus on enterprise solutions that span both all-software offerings and integrated software-hardware solutions. Put simply, companies that know who they are have a better chance of winning in the long run. Those that don't should think twice about confusing M&A train wrecks for the soul of a new machine.