Microsoft, reorganized

By Kip Kniskern | Posted July 11, 2013 24 comments

So the rumored Microsoft reorganization was officially announced today, coming down pretty much just how Bloomberg News and All Things D said it would. In case you missed it (or spent an enjoyable 12 hour day at work, like I did), Microsoft made the restructuring official with a press release, and the release of a letter from Steve Ballmer to the company. The short version? Microsoft is doing away with self-contained “Divisions”, the notorious siloes that kept Windows and Office strong, but kept the company from operating with a single strategic purpose. In his letter, Ballmer boiled it down, explaining that the company will be organized by function:

  • Engineering (including supply chain and datacenters)
    • OS (led by former Windows Phone President Terry Myerson), formally the Operating Systems Engineering Group
    • Apps (led by Qi Lu, formerly President of the Online Services Business), Applications and Services Engineering Group
    • Cloud (led by former Server and Tools President Satya Nadella), Cloud and Enterprise Engineering Group
    • Devices (led by former Windows head Julie Larson-Green), Devices and Studios Engineering Group
  • Marketing (Tami Reller)
  • Business Development and Evangelism (Tony Bates)
  • Advanced Strategy and Research (Eric Rudder)
  • Finance (Amy Hood)
  • Human Resources (Lisa Brummel)
  • Legal (Brad Smith)
  • and Operations (Kevin Turner)

More broadly, Ballmer seeks to redefine Microsoft, placing emphasis on focusing on a single company wide strategy, and to deliver:

…a single experience for everything in a person’s life that matters. One experience, one company, one set of learnings, one set of apps, and one personal library of entertainment, photos and information everywhere. One store for everything. Microsoft has the clear opportunity to offer consumers a unified experience across all aspects of their life, whether the screen is a small wearable, a phone, a tablet, an 85-inch display or other screens and devices we have not yet even imagined.

Of course, it could easily be said that Google and Apple, among others (Samsung?, Nokia?, Yahoo!?…) are also striving for the very same “single experience”, and for Microsoft, getting the ship to turn around once again is going to take more than just a couple of memos.

Ballmer alludes to the challenges the company faces in changing corporate culture and processes, but to pull the marketing and business development functions out of the engineering units where they’re now all rolled into one is going to be a monumental effort. Those siloes took years of turf battles and developing allies (and enemies) to form, and to suddenly pull it all apart and have it come back together will be quite the trick. Still, that Ballmer has recognized and named the problems, and come up with a plan to solve them is an immense first step.

We’re leery of any plan that doesn’t include at least some head rolling, especially in the areas of program management where those marketing and business development functions are going to be almost by definition redundant, but Ballmer stated in a media and analysts conference call that “We have no plans for layoffs”. We’re also leery of a reorganization that promises a more “nimble”, more “decisive, more “motivated” company without cutting some fat. Obviously there’s a lot more to learn about just how this all plays out.

In theory, reorganizing by function, focusing on a single strategic purpose, emphasizing speed and decisiveness, and consolidating marketing could get Microsoft to get out of its own way and harness its considerable resources. While infighting, a glacial pace, and a pompous arrogance have derailed the company especially when competing in the consumer space, Microsoft has done a lot right, lately, too. Steps to tie all its efforts together with one core operating system, an intriguing and unique “Modern” user interface that works with touch as well as more traditional inputs, some bold first steps into the world of devices, and an emphasis on the lucrative aspects of “serious fun” have Microsoft in a position where they might just be able to compete, if they only weren’t years late to the party. This isn’t a win and go home type of battle, though, and while Microsoft has lost the last few rounds, it finally appears poised to put the past behind it and come out, once again, fighting.

Is a reorg what Microsoft needs to regain its former luster? Can the company really become nimble and decisive? Or are we witnessing Ballmer’s last stand? What do you think about Microsoft’s big reorg news?

Posted July 11th, 2013 at 10:56 pm
  • warren g

    I think the Microsoft greed is coming home to roost…..The failure of Win 8 and so on..Microsoft forgot about what made them the powerhouse they use to be THE PEOPLE they stopped listening to the people and thought the brand would carry them through (not). During this restructure process they need to get back to what made them in the first place (the people). As for me I’m in the process of moving over to Linux distributions entirely. The software is fast and stable and most important it’s FREE I can put it on any computer in my house unlike greedy Microsoft software (1 PC crap after paying a ton for the software)….

    • TheRickshaw

      If you would rather run Linux, then you should do it, and decrease the surplus complaining.

      Building a powerhouse vs. joining a commune. It’s an interesting contrast, but not a good comparison.

      In the future, “The People” will demand the Start Screen just like they currently demand the Start Menu. “The People” asked for neither originally. Best not to listen too closely to “The People”.

      • warren g

        This is America I have the right to speak my own opinion considering all the money I’ve spent on Microsoft products. If you want to be a Microsoft devotee that’s your problem but I’m speaking known facts about Microsoft greed, however I really don’t have to say nothing the Microsoft sells facts and slowing popularity speaks for itself

        • TheRickshaw

          Actually, this is the Internet.

          And once again (because I ask this all the time), what does America or free speech have to do with incessant vague whining about Microsoft from people who are “done” with stupid, evil, Microsoft. Yikes. Real free speech should not be devalued so.

          You don’t need and therefore do not have “the right” to say such things. You just say them. Simple. I will still suggest that your arguments are weak and confused.

          Whatever $ you gave Microsoft for products did not also make them beholden to your particular future preferences. And you are under no obligation to give them any more. So lets not hear any more about that. Would lifelong mutual admiration be preferable? Sure. Guaranteed? Impossible.

          What I’m saying is, *you* should do what *you* say and leave the worrying about Microsoft to us “devotees”.

          • warren g

            I seen your profile and you seem to think your smarter then ever one else but your just a asshole so therefore your disqualified. Your one of those who lives and breath’s Microsoft and loves to be controlled i.e. (Microsoft scanning your computer making sure your software is authentic) You probably sleep with your Xbox and dream of the day you can meet Steve Ballmer, then when you do you’ll probably fall down to your knee’s and kiss the ground he walks on and thank him for allowing you to buy his product. See with Linux we’re free to make or own decisions not waiting for Microsoft to tell us what we can and can’t do with something we paid for. I like freedom which sadly allows an ass like you to be on this web page. You probably need somebody to tell you what time to get up in the morning and turn off that Xbox and go to bed you like to be controlled you need to be controlled DON’T you.

          • TheRickshaw

            …sigh…

          • warren g

            Yeah that’s what I thought one denominational………………..I’m done dealing with you, your a waste of time!!!!!!!!!!!!!!!!!!!!!

    • Sugadevan

      Win8 is a failure?? hmm ok.

  • warren g

    I think the Microsoft greed is coming home to roost…..The failure of Win 8 and so on..Microsoft forgot about what made them the powerhouse they use to be THE PEOPLE they stopped listening to the people and thought the brand would carry them through (not). During this restructure process they need to get back to what made them in the first place (the people). As for me I’m in the process of moving over to Linux distributions entirely. The software is fast and stable and most important it’s FREE I can put it on any computer in my house unlike greedy Microsoft software (1 PC crap after paying a ton for the software)….

    • TheRickshaw

      If you would rather run Linux, then you should do it, and decrease the surplus complaining.

      Building a powerhouse vs. joining a commune. It’s an interesting contrast, but not a good comparison.

      In the future, “The People” will demand the Start Screen just like they currently demand the Start Menu. “The People” asked for neither originally. Best not to listen too closely to “The People”.

      • warren g

        This is America I have the right to speak my own opinion considering all the money I’ve spent on Microsoft products. If you want to be a Microsoft devotee that’s your problem but I’m speaking known facts about Microsoft greed, however I really don’t have to say nothing the Microsoft sells facts and slowing popularity speaks for itself

        • TheRickshaw

          Actually, this is the Internet.

          And once again (because I ask this all the time), what does America or free speech have to do with incessant vague whining about Microsoft from people who are “done” with stupid, evil, Microsoft. Yikes. Real free speech should not be devalued so.

          You don’t need and therefore do not have “the right” to say such things. You just say them. Simple. I will still suggest that your arguments are weak and confused.

          Whatever $ you gave Microsoft for products did not also make them beholden to your particular future preferences. And you are under no obligation to give them any more. So lets not hear any more about that. Would lifelong mutual admiration be preferable? Sure. Guaranteed? Impossible.

          What I’m saying is, *you* should do what *you* say and leave the worrying about Microsoft to us “devotees”.

          • warren g

            I seen your profile and you seem to think your smarter then ever one else but your just a asshole so therefore your disqualified. Your one of those who lives and breath’s Microsoft and loves to be controlled i.e. (Microsoft scanning your computer making sure your software is authentic) You probably sleep with your Xbox and dream of the day you can meet Steve Ballmer, then when you do you’ll probably fall down to your knee’s and kiss the ground he walks on and thank him for allowing you to buy his product. See with Linux we’re free to make or own decisions not waiting for Microsoft to tell us what we can and can’t do with something we paid for. I like freedom which sadly allows an ass like you to be on this web page. You probably need somebody to tell you what time to get up in the morning and turn off that Xbox and go to bed you like to be controlled you need to be controlled DON’T you.

          • TheRickshaw

            …sigh…

          • warren g

            Yeah that’s what I thought one denominational………………..I’m done dealing with you, your a waste of time!!!!!!!!!!!!!!!!!!!!!

    • Sugadevan

      Win8 is a failure?? hmm ok.

  • sun

    Steve Ballmer is probably the best thing to happen to MS. What a brolliant ceo :)

  • sun

    Steve Ballmer is probably the best thing to happen to MS. What a brolliant ceo :)

  • chinch987

    gotta love the pundits. If Ballmer does nothing he’s painted as the dopiest CEO in history (ignoring the fact that he runs a company making obscene profits year after year and has many “services” in place – the same ones like Bing the pundits want him to shed LOL).
    Now he finally (a little late of course but see prior profits) sets in motion the removal of the absurd “divisions” and repurpose the company to be more nimble while also putting the little kid locked in the closet by his older brothers (Terry) in charge of the entire Windows ecosystem… and the same lame pundits are griping again.
    Any plan needs proper execution but the pundits should wait until 8.1 and 2014 before ripping into Ballmer further. Everything is indeed in place to execute very well on all levels with lots of room for growth while the “pc industry” declines.

  • chinch987

    gotta love the pundits. If Ballmer does nothing he’s painted as the dopiest CEO in history (ignoring the fact that he runs a company making obscene profits year after year and has many “services” in place – the same ones like Bing the pundits want him to shed LOL).
    Now he finally (a little late of course but see prior profits) sets in motion the removal of the absurd “divisions” and repurpose the company to be more nimble while also putting the little kid locked in the closet by his older brothers (Terry) in charge of the entire Windows ecosystem… and the same lame pundits are griping again.
    Any plan needs proper execution but the pundits should wait until 8.1 and 2014 before ripping into Ballmer further. Everything is indeed in place to execute very well on all levels with lots of room for growth while the “pc industry” declines.

  • uberlaff

    Just wanted to say that “heads have been rolling” for a couple years now. There was a long lead up to this reorg.

    • http://www.LiveSide.net Kip Kniskern – LiveSide.net

      Agreed, but I was referring to what appears to be redundancies at the program manager level, where before each division was responsible for its own marketing, etc. Now, marketing is to be handled by a central marketing arm. Are all the same people just going to have different bosses? That doesn’t sound more nimble or decisive to me.

  • uberlaff

    Just wanted to say that “heads have been rolling” for a couple years now. There was a long lead up to this reorg.

    • http://www.LiveSide.net Kip Kniskern – LiveSide.net

      Agreed, but I was referring to what appears to be redundancies at the program manager level, where before each division was responsible for its own marketing, etc. Now, marketing is to be handled by a central marketing arm. Are all the same people just going to have different bosses? That doesn’t sound more nimble or decisive to me.