“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?
I say this reorg is just rearranging the deck chairs. Know what?
Because the reorg is based on maximizing revenue, not based on creating the engineering environment to produce great products. At Microsoft, everything because subservient to “revenue growth” and the result is they’re going to push out products regardless of quality in order to reach those revenue targets.
Whereas Apple takes the engineering approach: worry about producing a great product and customers will follow (make sure to mix in killer marketing to make sure people know about the product, too).
Just watch. Six months from now, Microsoft will announce yet another delay to Vista.
‘Bill Gates, once the richest man in the world’ – bet he’s wishing he could actually cash in all his shares right now, while they’re at the top.
My guess – as earlier – Microsoft are doing an IBM. Those of you old enough will remember ‘No one ever got sacked for buying IBM’. And then all of a sudden they made the biggest loss in corporate history (partly through accounting practices – when you make a loss, you include everything you can into one hit).
They restructured and have eventually come back as a different firm, based more around consultancy than hardware sales. Most of their mainframe only competitors that stuck in the hardware business are now dead or now better known for making cheap printers.
MS still seem disturbingly good at spotting the challenges to them and responding. Not always at first – took them a while to ‘get’ the Internet, or the threat of Sony Playstation, Palm, or smart phones. And they don’t always respond well – usually takes a few generations for them to get there. But they are determined and they have cash coming out of their ears.
Right now they seem to be recognising that losing control of the desktop may be inevitable – there’s lots of factors driving it (rise of viable alternatives, movement of applications from the desktop to being web driven services, rise of portable ‘sub-computers’ – PSP and Smart phones with built in non-IE browsers).
That’s why there is a lot of activity around development tools and the server space (traditionally a Unix strength). Actually, they’re competing on all fronts – SQL Server with Oracle and mySQL, the new GUI layers (Glass/Avalon/etc) against Apple and Linux desktop innovation, against Flash with Sparkle, and against LAMP / AJAX and other ‘open’ web architectures with .NET, PS3 with Xbox360 – they will lose some battles but that’s not an organisation in terminal decline.
Let’s just get them back out of the home and into business where they belong!
This is the next step in the removal of Ballmer.
It was done to blunt Ballmer´s direct interference in the lower depts, isolate him at the top.
SCREW OFFICEMAC
If you research the alternatives and evaluate your true needs, you’ll realize you can usually do without it.
It’s the brainwashed lemmings that feed at the Microsoft table and think there isn’t anything else “out there” or afraid to try.
After all a spreadsheet is a spreadsheet, and a word processor is a word processor. They all pretty much work the same and can share files.
If your sending files to someone else to be edited instead of PDF’s, then your a lackey.
The anti M$ whinning of this site is getting very very boring.
MicrosoftDailyNews?
Maybe Microsoft are actually looking to the future?
Surely it can’t be too long until the U.S. D.O.J. (or whoever deals with big corps in the U.S.?), the E.U., or whoever, finally decides that they have too much of a monopoly and forces the company to split into different divisions. Preparing for this and reorganising at this stage would be a good move.
Unfortunately then we would have three companys producing crap rather than one…
What happens to MacBU???
“…three large divisions led by individual presidents, each reporting to Steve Ballmer…”
That means three extra large boxes of Krispy Kremes, boys, at the morning meeting.
Maybe they have just seen the future (vista perhaps) that is Sony self destructing because it is too large, pulls in different directions causing confusion, mis-placed products and total lack of direction. After all, all of this has been evident under their very own noses for some time.
No innocent furniture was harmed during the filming of this reorganization.
This brilliant and well timed move will no doubt result in Vista being completed and released on the market 6 months ahead of schedule if not sooner………….. right?
Mac-Animal,
the presence of a Mac Business Unit in MS is important from a corporate buyer’s standpoint, as Office is the de facto standard now, and an “out of the box” ability to use and generate Office-compatible documents is necessary to fit into the environment.
Rainy Day- loved the “Foundation” reference. Does that mean Steve Jobs is Hari Seldon?
Also, what kind of revenue stream is the XBlox180 when they lose money on every unit? Do they make it up in volume?
MW-field as in” the results of the MS reorg will leave the field clear for _________ (insert favourite non-MS product)
Apple should use MS’s advertising agency. Apple’s agency sucks- big time.
It matters not how great the Mac is, if the general population (customers) are unaware of it.
Just wait, you’ll see Vista on every TV screen soon, telling the gullible massses how it’s going to be the salvation of the computing experience.
B-Sabre,
I think I read somewhere on MDN that M$ Office was going ‘open standards’ in 2006 or 2007, so docs created in Office should be openable (is that a proper word?) in just about any program or platform, so it won’t be necessary to buy Office and generate Office-compatible documents to fit into the office environment, any program will do.
Re: the earlier article, if I remember correctly, after a statement by a representative of the state of Louisiana’s government, they are putting into force an ‘open standards’ policy on document generation and distribution to roll out in 2007, and have recommended all government departments use a certain brand of non-M$ software for this. A M$ spokesman was then quoted as saying he was sorry to hear this as Office should be open standards by then.
If a lot more State’s take this stance (and avoid paying high license fees for M$ products) then M$ will loose a lot of contracts…
maybe someone could post a link to the earlier article?
Reorganization – the beginning of the end for a company heading down.
ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ
MW: “same” As in: “more of the”
>then M$ will loose a lot of contracts…>
Either- let loose a lot, or, lose a lot.
M$ is office and most offices are M$, on the short term …
after that M$ is to big to be a leader.
Apple is Steve J and beautiful …
but what without Steve J ? To small ?
Between the Krispy Kremes and Cheeseburgers, you can be sure that Balmer will keep this department under his personal supervision.
The Cafeteria.
I heard the dining room chef got stock options from Monkey Boy.
Love it!
FLAAG is responsible for the slow downward spiral of Microsoft towards extinction.
Firefox is showing that innovation can actually take place on the browser.
Linux is squeezing profits from Microsoft in the server market.
Apple is killing Microsoft in desktop innovation as well as video and audio.
Apache is preventing Microsoft from dictating how the web works.
Google is dominating Microsoft for Applications on the web.
The combination of these 5 are attacking Microsoft from all sides and Microsoft can’t respond to any single one of them.
Its like a lion can kill one hyena but one lion is no match for 5 hyena’s.
I’m an Apple fan, so please don’t get me wrong. But, I’m sick of Apple Fanboys having “short-man” syndrome.
Desperate measures? Having a 90something percent market share, and lets not forget, the world runs on MS Office, I find it impossible for a $280,000,000,000 market cap company to be in “desperation mode”.
Any died in the wool capitalist can see (and appreciate) that this is a smart move, one that will spark creativity and improved software.
Does anyone remember when Apple “restuctured” into two divisions, one for iPod and one for Macs? Folks, even in these forums, thought “won’t be long ’till they stop making PC’s altogether.” But, instead, it was done in the name of competition and better product development.
I like the current PC wars. Competition is good. Apple will win some, MS will win some, and they’ll both take their lumps too.
Yar! The vessel will be in pieces. She’ll be
makin’ her final rest at the bottom of the briny
deep. The lady of the sea will claim yet another
victim.
Look over there! It be Moby Dick! Yar!
> Any died in the wool capitalist can see>
That would be ‘dyed’ in the wool, as in – making it a permanent.