Gates, Nadella opposed Nokia acquisition: report

Though Microsoft's acquisition of Nokia is in the final stages, according to a new report the deal was one of the major reasons for Microsoft chief Steve Ballmer, making an early exit from the world's biggest software maker.

According to the report in Businessweek, Microsoft founder Bill Gates and new CEO Satya Nadella had opposed the Nokia buyout, as did Skype founder Tony Bates and several other unnamed board members, even as Ballmer was pushing hard for the deal.

Nadella, however, changed his stance and supported the deal but Bates continued to oppose the deal till the end.

Bill Gates and others too were not keen about the smartphone business, as part of the wider debate about the software makers' experience in the hardware business.

The market share of Xbox One notwithstanding, it was not a profitable division for Microsoft.

Similarly, the Surface tablets had failed to gain much traction in the tablet market.

With the Nokia deal getting the go ahead, Ballmer lost favour of the board (See: Microsoft to acquire Nokia's handset business for $7.1 bn). According to the Businessweek report, concerns over Microsoft's direction had been mounting for months and for some directors, the question was whether Ballmer should still lead.

Although Ballmer got what he wanted, when the board signed off the $7.2-billion purchase of Nokia's mobile business, his relations with the board soured to such an extent that the directors started to find a way to ease him out.

According to ITPro which quoted sources, the board contemplated hiring Ford CEO Alan Mulally to succeed Ballmer because he was someone he admired.

Mullaly had emerged an early favourite for the top post at the company, due to his work at Ford, but his age and lack of experience in the technology world appeared to be reasons for his losing out (Alan Mullaly spurns Microsoft; to continue as Ford CEO).

It later emerged that the Ford CEO fell out of favour when the Microsoft board felt he appeared to be suggesting he should get the job without giving an interview.

The three candidates who were finally considered were rumoured to be Stephen Elop, Nokia's former CEO, Tony Bates, executive vice president of Skype, and Satya Nadella, vice president of cloud and enterprise, who eventually got the nod.

After he took over as CEO last month Nadella  lost no time in restructuring the management.

While top executives including Tony Bates and Tami Reller (CFO) would quit the company, Mark Penn (Two top Microsoft executives to quit as Nadella readies to step in), a former Clinton family aide, would become the company's chief strategy officer.