Why the Google-Motorola deal matters for Microsoft-Nokia

[Commentary] People who in 2006 couldn't predict what 2013 would bring to tech giants like Microsoft, Google, Apple, Samsung, Nokia, and Motorola are now confidently tweeting the future of Microsoft and Nokia. The deal may very well amount to tying two sinking bricks together. And both Microsoft and Nokia face uphill battles. But at the same time, in the early days of September 2013, the only honest analysis you can give is that a mobile web everyone saw coming yielded a competitive landscape few expected.

And if we can't foresee which company will be on top in another several years, the best we can do is look at similar deals that have happened in recent years. Which brings us to Google's purchase of Microsoft, announced a little more than two years ago. At the time, people struggled to understand the sense of it. People speculated, as they do with Microsoft's Nokia investment, it had to do with patents. That Google would simply spin off Motorola's manufacturing operations. At the time, it seemed like the most likely explanation. But Larry Page, Google's new CEO, took a different direction. He held onto the Motorola devices that had been outmoded by Apple's iPhone. Although Motorola has been a drag on Google's earnings since then, the move seems prescient now. Software hasn't just supplanted hardware in the past decade. It needs hardware as an ancillary business. Microsoft's unexpected introduction of the Surface underscored that idea. And now its Nokia deal makes it seem that much more inevitable. In other words, many companies can produce software on their own, but once you get big enough, you need hardware in the mix to stay on top of the game.