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More Microsoft restructuring news

Written on:June 4, 2013
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New-Microsoft-LogoYesterday we mentioned an All Things D post with news that Microsoft is considering a broad restructuring, and today, Bloomberg News has more.  Both publications report that the plans are not final and may change, but Bloomberg’s report today gives us a clearer picture of what might be coming.

The restructuring would reduce the number of business units at Microsoft (currently at 8), and as Microsoft publically announced it would do last year, would place a greater emphasis on “devices and services”.  As we mentioned yesterday, a restructuring would bring a host of “new” faces to the forefront, including Satya Nadella, currently head of Server and Tools, Xbox head Don Mattrick, Online Services President Qi Lu, Tony Bates, and Julie Larson-Green.

While plans are evolving, Bloomberg reports that one idea under consideration would create four divisions:

One idea under consideration by Ballmer would create four divisions: an enterprise business led by Nadella; a hardware unit overseen by Mattrick; an applications and services division under Lu; and an operating-systems group jointly led by Terry Myerson, Windows phone chief, and Julie Larson-Green, head of Windows engineering, said one person. Bates would also be given a significant role, said the person.

Bloomberg also reports that the restructuring plan has been under consideration since before Steven Sinofsky left the company, somewhat abruptly, immediately after Windows 8 launched:

The reorganization has been under discussion even before Sinofsky’s ouster, said the people. Ballmer stressed at the time the need for Microsoft’s groups to better cooperate and for executives to make that happen.

Whatever the plan, it’s becoming clearer that a new group of leaders is emerging at Microsoft.  Satya Nadella has risen through the ranks, at one time heading up R&D for Online Services (Bing, MSN, advertising), to lead Server and Tools through a fundamental shift to the cloud, as he detailed yesterday in an email to the troops published on the Official Microsoft Blog:

Two years ago we bet our future on the cloud and quietly refocused our 19 billion-dollar software business by completely transforming our products, culture and practices to be cloud-first. We knew the journey would be long and challenging with plenty of doubters. But we forged ahead knowing that the cloud transition would change the face of enterprise computing.

As it turns out we were right to take this risk. Because of the fundamental shifts the cloud brings, more than 2 trillion dollars of overall IT spend is now up for grabs. It starts with the rapidly exploding world of devices and a new generation of connected apps that are revolutionizing life and business. Software-driven datacenters are making access to computing resources infinite and elastic. Big Data is changing the way we gain insight and act in business, science and society. Cloud is the central architectural paradigm that makes all of this possible.

Tony Bates and Qi Lu came from outside the company, Bates from Skype and Lu from Yahoo!, while Mattrick and Larson-Green, like Nadella, rose through the ranks.  Another name rapidly rising in prominence is Azure development head Scott Guthrie, who has achieved “rock star” status among Microsoft-centric developers, famous for his red shirts and open manner.  He’s already made great strides at Azure, stepping up the pace of innovation and getting the Azure name out there as a viable alternative to Amazon’s cloud computing services.

CEO Steve Ballmer has accomplished a pretty thorough house cleaning, somewhat quietly, in the past few years.  Gone are old guard stalwarts like Sinofsky, Craig Mundie (still a “senior advisor”),  Bob Muglia, Xbox’s Robbie Bach, and even Ray Ozzie, who was said to have battled with Sinofsky over Live Mesh, and lost.  Will this new regime be better able to make the mobile and cloud services transition that is rapidly happening across the industry?

 


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