Microsoft's Nadella: Despite Nokia hardware purchase, we're a software company

Microsoft (NASDAQ: MSFT) CEO Satya Nadella said that despite the firm's $7.5 billion purchase of Nokia's (NYSE:NOK) devices and services business, Microsoft is still at its heart a software company.

microsoft CEO Satya Nadella


Speaking Tuesday at the Re/code Code Conference, Nadella said that "I definitely don't want to compete with our OEMs. I want to create categories." According to Re/code, Nadella said his strategy regarding Nokia will not be simply to take a company that had been an OEM running Microsoft's Windows Phone software and "just run it like Nokia, the OEM of our phones."

"We are a software company at the end of the day," he said.

However, according to the Wall Street Journal, Nadella also said that Microsoft needs to forge ahead with its own devices from time to time to push new technology and create new business models.

Nadella said building reference design devices is one way to approach the issue, but said that requires OEM partners to do a lot of investing. "In order to be in the hunt for (next-generation) experiences, you have to build hardware," he said, according to GigaOM. "You have to be all-in to create demand for these experiences."

Nadella has defended Microsoft's recent decision to eliminate licensing fees for Windows device makers that are building smartphones and tablets with screens smaller than nine inches. The Microsoft chief said in late April that said that the move is a way to grow the Windows Phone ecosystem more quickly. Analysts have said that decision should make it more palatable for OEMs and ODMS to use Windows Phone even with Nokia now inside Microsoft.

Microsoft is adding 25,000 employees as part of the Nokia deal. Nadella, Microsoft co-founder Bill Gates and other board members and executives initially were against former CEO Steve Ballmer's idea to purchase Nokia's handset business, according to a Bloomberg BusinessWeek report from March. Nadella was asked about his position on the deal at the conference and declined to comment.

For more:
- see this Re/code article
- see this WSJ article (sub. req.)
- see this GigaOM article
- see this ZDNet article

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