Microsoft announces sweeping reorganization

“Microsoft on Tuesday announced a sweeping reorganization of the company into three new divisions, a shift that will lead to the retirement of longtime Windows development chief Jim Allchin,” Mike Ricciuti and Martin LaMonica report for CNET News. “The plan calls for a reorganization of Microsoft into three large divisions led by individual presidents, each reporting to Steve Ballmer, Microsoft’s chief executive.”

“The huge reorganization is designed to streamline the company’s decision-making process and improve product development, Ballmer said in a statement,” Ricciuti and LaMonica report. “With the realignment, the new Platform Products and Services division, which includes Windows, will cover roughly 60 percent of Microsoft’s revenue. The Business division is expected to be the source of roughly 28 percent of the company’s revenue, while the Entertainment and Devices Division will make up roughly 10 percent of the company’s business.”

Full article here.

“Microsoft’s just-announced reorganization gives hosted-software services a starring role, providing a clear picture of the company’s plan to stimulate revenue growth,” LaMonica reports in a separate CNET article here.

MacDailyNews Take: This realignment seems overdue for Microsoft. Do you think it will make for a faster, more nimble ship or are they just rearranging deck chairs?

63 Comments

  1. I predicted Allchin would get a boot over a year ago. It’s amazing he lasted this long, considering how badly the Windows ship has been leaking and listing under his guidance.

    But a company as big as Microsoft can’t reorg on a dime. This will no doubt heighten the sense of crisis and dampen morale even more, as the thousands of middle managers batten down the hatches to protect their turfs.

    Result? More defections of the top talent, leaving only “C” players to grab the open positions by playing politics (because “B” players actually try hard to be “A” players). More delays. More confusion. Drastic downsizing. Bobbled marketing. Downward. Death. Spiral.

  2. Too bad the sales guy is still in charge…

    DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS, DEVELOPERS…

    http://www.flamingmailbox.com/maccomedy/movies/balmer.html

  3. it’s not the composition of the ship’s crew, or even the passengers on the ship, but the direction of that ship that makes the difference. MS is heading in the wrong direction, and has been for a long time. Think back to HP a few years ago and their reorganizations. Made no difference. The company lost sight of the market, forgetting that the desire of the customer, not the desire of the company, is the market.

    MS has a lot more changes to make than just reorganization. Vision, leadership, direction…. they don’t have it.

  4. Is it ever too late to rearrange the deck chairs? I’m sure, had they done so, the Titanic looked good going down.

    Reorganizations do have a motivating effect on Companies, even poorly planned ones. Everybody wants to keep their jobs, and work suddenly gets done sooner and better.

    This reorganization will be especially important because MSFT has retired their OS development chief (I’m sure they are going to make it very attractive for him to step down). Everybody below him has to be in fear of losing their job.

    Be that as it may, reorganizations take upwards of two years to show measureable results. MSFT goofed big time when they created their seven division monster. Shrinking it to 3 divisions is a move in the right direction, but alas, it won’t stem the tide working against MSFT now.

  5. << it’s not the composition of the ship’s crew, or even the passengers on the ship, but the direction of that ship that makes the difference. MS is heading in the wrong direction, and has been for a long time. Think back to HP a few years ago and their reorganizations. Made no difference. The company lost sight of the market, forgetting that the desire of the customer, not the desire of the company, is the market.

    MS has a lot more changes to make than just reorganization. Vision, leadership, direction…. they don’t have it.>>

    Absolutely right on Jim. The major problem at MSFT is Gates. He has NEVER developed a product that created a market. Gates is a copy cat that got incredibly lucky at the same time that IBM got incredibly stupid (and licensed his non-existent OS). His business tactics made Windows the default OS, and now he presides over a business with probably the most rotten core possible.

  6. I thought that in the year 2000 when the U.S. Justice Department had ordered Microsoft to split itself into 3 companies that Microsoft said doing so would be impossible. Microsoft successfullly fought off the antitrust regulators in order to stay together. Today they are hypocritically splitting into 3 divisions because it suddenly occured to them that actually it may be in their own best interest.

  7. Personally, I’d like for Ballmer to send me a check for the remaining “roughly” 2% of expected business over the next year that he apparently left out of his estimates. Hell, the next month’s revenue could set me up for life, and I wouldn’t feel dirty at all, or for very long. I promise! ” width=”19″ height=”19″ alt=”red face” style=”border:0;” />

  8. It’s apparant with the recent return of Steve Jobs, the success of the iPod (especially on Redmond campus), Mac OS X, the Intel switch, Google, Linux etc., that M$ has been dying a slow death.

    Apple and Google are the fresh boys on the block.

    First Apple introduced the PowerMac G5 and shocked the Intel world that consumers would want/use a dual processor 64 bit workstation.

    Then Apple shocked the music labels with a successful online music store.

    Then Apple shocked Microsoft by announcing a switch to Intel chips.

    Lot’s of shake, rattle and rolling going on and

    IT’S ABOUT FRIGGING TIME

    I haven’t been this excited about technology for 20 years.

    MDN Word: “hes” isn’t that supposed to be “he’s” ??

    MDN: Degrading the english language to thwart post bots since a few months now.

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