Friday, December 5, 2014

Microsoft Misses With Nook

The partnership between Barnes and Noble and Microsoft is officially over although its hard to say that it ever really started.  Despite a $300 million dollar investment back in 2012, nothing particularly visible to the consumer ever occurred and Microsoft leaves with a loss.  So much potential, so little execution.

Truthfully, when the Nook partnered with Samsung on its tablets, it was apparent that Microsoft was no longer a part of the conversation.  But that may have been decided when Microsoft's new CEO, Satya Nadella took over.  Per CNET, "Since taking the helm in February, Nadella has said that he wants to focus Microsoft's business on the core elements of its operation, including the cloud and mobile."  And now B&N can begin to separate its Nook business from its bookstore business. 

It is a missed opportunity for Microsoft and B&N, but perhaps a win for Samsung, Apple or others.  Going forward, I believe that B&N should work with a device maker on a tablet that is specifically designed for students, ideally college and high school.  All textbooks should be digitized for this new device as well as designed for note taking on the pages and a means to capture and organize the  writing for test taking and report writing.  This new device is not meant for games or non academic purposes; rather, a unique featured device to support school curriculum.  I see it as a niche device not as general purpose as the current Nook, Galaxy, or iPad.  By engineering it with a writing instrument that can translate writing into digital, it will enable students to better organize classroom work with connected textbooks.  For B&N, its future and its growth is in the education market and it needs to embrace the industry quickly.

For Microsoft, the opportunity to seize on this market ends with this partnership.  Given their new direction, it is clearly the right move for Microsoft to terminate this agreement.  But it is the right move for someone else.