Satya Nadella, Bill Gates initially opposed acquisition of Nokia's phone business: Report

Microsoft announced its decision to acquire Nokia's Devices & Services business in a EUR 5.44 billion deal back in September last year. Now, a new report sheds some light on the events leading up to the announcement and its aftermath, linking the departure of Steve Ballmer, and the eventual appointment of Satya Nadella as the new Microsoft CEO, with the Nokia deal.

A report by Bloomberg Businessweek says that the Nokia deal was the brainchild of then CEO Steve Ballmer, but he faced some resistance from the company's board, as they struggled with the question, "Should Microsoft be a software company or a hardware company too?"

Opponents of the deal initially included Bill Gates, Ballmer's longtime friend, and Satya Nadella.

Several directors and co-founder and then-Chairman Bill Gates - Ballmer's longtime friend and advocate - initially balked at the move into making smartphones, according to people familiar with the situation. So, at first, did Nadella, signalling his position in a straw poll to gauge executives' reaction to the deal. Nadella later changed his mind.

Tony Bates, who came to Microsoft after the purchase of Skype and left the company earlier this week after Satya Nadella's first executive reshuffle, was also opposed to the deal.

Even on Ballmer's senior team, the acquisition wasn't universally popular. In the straw poll, several executives initially voted against it, including Nadella and Bates, according to people with knowledge of the matter. Nadella later sided with Ballmer, while Bates remained staunchly opposed.

Bill Gates also had his doubts about Microsoft expanding its hardware business. The report adds, "Gates didn't agree that the world's largest software maker should produce its own mobile devices, and Ballmer was hurt that Gates didn't back him."