How the Microsoft-Nokia Deal Affects Open Source

A lot has been said already about the partnership between Nokia (NYSE: NOK  ) and Microsoft (Nasdaq: MSFT  ) . We've already heard the good and the bad, so here's the ugly. Where there are winners, there are losers as well. In this case, the winners are clearly Microsoft and possibly Nokia, depending on how well the deal works out. On the loser side we have a couple of open-source projects and Intel (Nasdaq: INTC  ) .

This is not going to be yet another rant on how good or bad Nokia's decision was. A change was necessary, as the previous offerings didn't deliver, and going with Microsoft was one of a few options. It was the one option the management deemed the most attractive, and as such, the business decision was valid. Shareholders apparently didn't agree, as the losses of Nokia stock showed. But you have to consider that a lot of shareholders bet on the future while believing only in the present and the past.

So what about those open-source projects Nokia is involved in? The previous strategy entailed Symbian and MeeGo. MeeGo was slated to be the successor of the Maemo OS for high-end smartphones and possibly tablets, trickling down to mainstream products subsequently. Symbian is Nokia's bread-and-butter smartphone OS; the company uses it in a broad lineup of current products and planned to take it to entry-level markets in the near future. That last part of the strategy will still become true, as Windows Phone 7 will initially serve as a high-end replacement, while Nokia still plans to sell another 150 million Symbian-based phones.

What both platforms have in common is that they're built around the Qt GUI framework that's also available on other platforms. All this software is available under open-source licenses, meaning that other companies and individuals can contribute if they choose to. Nokia stated that it wants to continue MeeGo, Symbian, and Qt development. But seriously, how likely is this strategy to become a reality, when even the CEO of Intel says that's not expected?

At the Mobile World Congress, Nokia also touted the business advantages of the deal with Microsoft, specifically citing savings in the software-development area. On one hand, Nokia claims to continue development, while on the other hand it wants to save money since Microsoft is primarily responsible for the development. How are these contrary goals supposed to line up?

Here's how: Symbian will get minor improvements during its remaining lifecycle. Once Nokia is done selling Symbian-based devices, it will be done with Symbian development, too. Anything else doesn't make sense, business-wise. Regarding MeeGo, it's ridiculous how Nokia wants to reduce its commitment and use MeeGo as a development vehicle, as the company says. Sounds more like a slap in the face. The one product Nokia plans to ship with MeeGo is probably part of the old contracts they can't maneuver out anymore.

After considering all of this, Qt is the last open-source project Nokia was heavily involved in. Once Symbian and MeeGo are no longer important to Nokia, the same will be true for Qt. Qt on the Windows Phone platform is not even an option, since it uses a completely different development environment. Even Qt developers agree that this would hurt platform consistency. So from a business point of view, at this point it no longer makes sense to fund Qt development once it's no longer relevant for Nokia's products. Under this light, the claims of how much Nokia likes Qt look moot, and the fate of Qt hangs on the future of 150 million more Symbian phones and the use of MeeGo as a development vehicle. Not quite the thing to bet on in the long term -- thus, Nokia is abandoning its own ecosystem of around 350 million Symbian-powered phones.

Thus, those open-source projects will be without Nokia's support in the near future. Nokia will probably slowly but steadily reduce resource investment in open-source projects until it has reached the point where it can withdraw, full stop. This won't happen until later this year or 2012, but in the following years it seems very likely. Conspiracy theorists could even go as far as to allege this to be part of an agenda at Microsoft to weaken open-source projects. In reality, there is no conspiracy. Just business.

The projects, especially Qt, will probably continue to exist and evolve on their own. Intel plans to drive MeeGo development forward, probably in the direction of tablets, as netbooks are all but dead. Qt is used in quite a few open-source and commercial projects, so it won't entirely go away anytime soon. However, it remains to be seen whether the open-source community is able to continue a working cross-platform strategy or whether the project will be split over differences of opinion.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 19, 2011, at 1:12 PM, DrunkLivnOnLake wrote:

    Open source does not foster an ecosystem as everyone wants something for free. Exercise [Bing or Google "Silverlight Components"] and recognize nothing compares in any other os. WP7 will be a major player as they already have markets within markets. Opensource will never have markets within markets. WP7 is poised to rule.

  • Report this Comment On February 19, 2011, at 8:27 PM, techy46 wrote:

    The key is evolution and transition. Nokia has a transition plan that will evolve as they get feedback from completed steps of the plan. I don't think anyone, including MS and NOK, can put absolutes on all the options they will face as their partnership evolves. The only thing sure is that WP7 will get the hardware and market exposure it needs to see if the mindshare follows. As that plays out, the impact on Open Source and all of the other players will become more certain. I don;t think Intel is that big of a loser either since I think their Medfield Atom at 32nm and then 22nm sill has tremendous potential in late 2011 and all of 2012.

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