Does Microsoft reorganization matter to customers?

There’s much speculation about reports of reorganization within Microsoft Corp. Today, the company’s CEO, Steve Ballmer confirmed that the giant software maker will undergo a “far-reaching realignment” aimed at enabling it to innovate faster.
“Going forward, our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.,” Ballmer said in a memo he sent to Microsoft employees.
He said this will entail better execution from product conceptualization and innovation right through to marketing and sales as well as a new focus on cloud services and the company’s data centre business.
“It also means operational excellence in cloud services, datacenter operations, and manufacturing and supply chain that are essential in a devices and services world,” Ballmer said.
The revamped organization looks like this:
Operating Systems Engineering Group – Terry Myerson will lead this group, and it will span all OS work for console, to mobile device, to PC, to back-end systems. The core cloud services for the operating system will be in this group;

Devices and Studios Engineering Group – Julie Larson-Green will lead this group and will have repsonsiblity for all hardware development. She will also take responsibility for all games, music, video and other entertainment;

Applications and Services Engineering Group, to be led by Qi Lu, will cover broad applications and services core technologies in productivity, communication, search and other information categories;

Cloud and Enterprise Engineering Group. Satya Nadella will lead development of back-end technologies like datacenter, database and specific technologies for enterprise IT scenarios and development tools;

Kirill Tatarinov will continue to run the Dynamics family of business applications, but his product leaders will also report to Qi Lu, his marketing leader will also report to Tami Reller and his sales leader will also report to the COO group;

In the Advanced Strategy and Research Group, Eric Rudder will lead research and trustworthy computing, teams focused on the intersection of technology and policy, and will look at key new technology trends;

Business Development and Evangelism Group will be led by Tony Bates. It will focus on key partnerships especially with partners like OEMs and silicon vendors, as well as evangelism and developer outreach.

In an interview before the announcement, Gartner Research analyst Carolina Milanesi said a reorganization was a foregone conclusion once Ballmer stopped talking about software which was the company’s power base for decades and began mentioning last year the need to refocus on “devices and services.”
Steve Ballmer (photo from

Patrick Moorhead, principal analyst for Moor Insights & Strategy, said that for companies the size of Microsoft reorganization may take several years and may “never be done” since enterprises or its scale are typically “perpetually reorganizing.”

The impact of reorganization will be “subtle and long term” said research firm Directions Microsoft which tracks developments at Microsoft.

He said this recent development seems to be the biggest change in the company since Directions started watching Microsoft. Helm expects the changes to be more about “whom than how they’ll reorganize.”

What does this mean for the customer?

The reorganization will decide which products go together and which products go to market, said Fran Gallet, analyst for Forrester Research.


Why stick with Microsoft?

He said recent developments at Microsoft seem to indicate that the company doesn’t expect to make much money in software anymore. The operating system is becoming just one element of the device.
For example SkyDrive, the online storage and syncing service of Microsoft, is being monetize when people buy a device.
There is also a chance that users will see “more seamless and better experience” between different devices such as smart phones and PCs, according to Moorhead.

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Jim Love, Chief Content Officer, IT World Canada

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