Google to integrate with Motorola
16/08/11 10:53
Google announced that it was going to buy Motorola’s handset hardware division for $12.5B. What are the many business implications of this? Does Microsoft have to be scared, or are the in a better position? What about Samsung that makes the hardware for Android phones - will they be competing with their partner?
We are interested in how the companies are going to integrate. How is a software company with a ‘new wave’ culture going to integrate with a hardware company with a ‘traditional’ culture? Very carefully and deliberately of course, if the integrated firm is going to be successful.
Google has done many things well, and this of course will be taken up as another challenge. However, this challenge involves changing people’s thinking and culture, for a major part. Secondly, the hardware business is not only low margin, but also has longer turn around times. When software is not working well, rolling out a fix takes days, but when hardware is broken, rolling out a fix is a logistic challenge and takes weeks or months.
Integration will involve functions, processes and people. From a functional perspective, integration calls for redundancies to be eliminated. From a process perspective, now the full supply chain of processes - from managing vendors, to manufacturing, to stocking and delivery now will be brought in-house. From a people perspective, the most challenging of course, is to be able to meld the cultures of both entities seamlessly. Employee relations, retention, and recruitment is going to be a predominant issue to address. The key to successful integration is planning, execution and compromises.
Perhaps Google wants to be like Apple - which, with its full control over both software and hardware, seems to be doing well now. However, Apple’s model is different and it’s not tied to its hardware makers at the hip. Larry Page did say in his blog that Motorola will be run as a separate business - to what extent is not clear. We’ll just have to wait and see....
We are interested in how the companies are going to integrate. How is a software company with a ‘new wave’ culture going to integrate with a hardware company with a ‘traditional’ culture? Very carefully and deliberately of course, if the integrated firm is going to be successful.
Google has done many things well, and this of course will be taken up as another challenge. However, this challenge involves changing people’s thinking and culture, for a major part. Secondly, the hardware business is not only low margin, but also has longer turn around times. When software is not working well, rolling out a fix takes days, but when hardware is broken, rolling out a fix is a logistic challenge and takes weeks or months.
Integration will involve functions, processes and people. From a functional perspective, integration calls for redundancies to be eliminated. From a process perspective, now the full supply chain of processes - from managing vendors, to manufacturing, to stocking and delivery now will be brought in-house. From a people perspective, the most challenging of course, is to be able to meld the cultures of both entities seamlessly. Employee relations, retention, and recruitment is going to be a predominant issue to address. The key to successful integration is planning, execution and compromises.
Perhaps Google wants to be like Apple - which, with its full control over both software and hardware, seems to be doing well now. However, Apple’s model is different and it’s not tied to its hardware makers at the hip. Larry Page did say in his blog that Motorola will be run as a separate business - to what extent is not clear. We’ll just have to wait and see....