The bottom line: Microsoft did the right thing.

Microsoft had no realistic choice but to acquire Nokia. If there is to be an alternative to Apple and Google in the mobile world, Microsoft had to pull on the big boy pants and play like the big boys.

Will this move be successful? Compared to what? My argument is that the alternative was almost-certain failure. Competitive industrial logic drove this transaction, from Microsoft's side.

The relative failure of Windows Phone to date comes down to two things:
  1. Too late. Just like BlackBerry, taking too much time to react to the 2007 launches of iPhone and Android doomed the situation. Chalk it up to complacency, or whatever you want to call it -- lack of innovation, not enough imagination, you name it.
  2. Partially following from being too late, Windows Phone isn't competitive with Google and Apple in the apps game. This is crucial. Most people agree that Windows Phone is competitive as an operating system. It's not enough to have 200,000 or 300,000 apps when the competition has one million.

"But almost nobody uses more than 30 apps" is something you often hear. So, having 300,000 available is clearly enough.

Wrong.

If 10 or 20 out of the 30 you use are among the 700,000 apps Windows Phone doesn't have, then it's game over. Heck, even a single one can break the case. I'm looking at you, Google.

So what is Windows Phone to do? There is no easy answer here. With BlackBerry on the death bed, at least it's now crystalized as to which is the number 3 operating system. Also, in the past Microsoft has spent millions on courting developers. Going forward, what if Microsoft simply spent billions courting developers? Does Microsoft have any more urgent spending priority?

The task facing Microsoft is monumental. It's doing all the right things, strategically. The problem is in product development, product definition, and product management. If the products aren't ahead of Google and Apple overall -- and perhaps not even on par -- having the right strategy, such as copying the Apple stores and acquiring Nokia's phone business, will simply not be enough.

As Winston Churchill said, sometimes it's not enough to do your best -- it's only required that you do what is necessary. When you compete with what I believe are the two best companies in the world -- Google and Apple -- it's not enough that Microsoft does its best.

At the time of publication the author was long GOOG and AAPL, and short MSFT.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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