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BLOG: What the reorg will reveal about Microsoft's future direction

Woody Leonhard | June 25, 2013
Ballmer could unveil his plans to restructure the tech giant this week. The key question is how will responsibility for Windows and Office be divvied up?

What the tea leaves tell us about the upcoming Microsoft reorg

Kara Swisher at AllThingsD reports that according to unnamed sources close to the situation, "Microsoft CEO Steve Ballmer is likely to unveil his plans to restructure the tech giant to a larger group of senior execs by July 1. ... Ballmer has been making these significant plans with limited consultation with the wider leadership group at the software giant. Instead, he has been working with only a small group of his direct reports and also some Microsoft board members."

While a reorg of Microsoft has been inevitable for months, the idea that it might happen this week brings all sorts of interesting possibilities and questions. Key among them: Is Ballmer's expressed "devices and services" vision for the future of Microsoft all a bunch of hype, or will he back it up with organizational changes that will make it happen?

As I explained when Andy Lees went on sabbatical earlier this month, the obvious post-reorg structure would reflect Ballmer's two pillars. In my opinion that would likely include Satya Nadella as head of "services" (he's going to play a key role in the Oracle Database 12c dog and pony show later today) and Don Mattrick as head of "devices" (in spite of his Keystone Kops impression last week on the Xbox One).  

Whatever it may look like in the future, Microsoft right now is much more than just devices and services, and it's not at all clear how the rest of the deck will play out. It's possible that Qi Lu — one of the few who currently holds the title "president" — will take on more than just responbility for Bing. It's also possible the other president without much portfolio, Tony Bates of Skype lineage, will inherit a bigger empire as well.

We'll learn a lot about Microsoft's future direction when we see how responsibility for Windows (including Windows Phone) and Office are divvied up. Although Microsoft's been trying hard to turn Office into a "service," and there's the Surface "devices" slant with Windows, it seems highly unlikely to me that Ballmer will bury those flagship products under Nadella. And that leads to a dilemma of fascinating proportions.

As far as I can see, there are four people qualified to head up the Windows/Office effort. 

Kurt DelBene has been running Office since September 2010, when he took over from Stephen Elop. DelBene has come up through the ranks on the Office side and has 20 years of experience running Office, Outlook, Exchange, and pieces thereof.

Julie Larson-Green has been running the Windows dev side since Steve Sinofsky left last November.  She has long roots in the Office effort, alongside Sinofsky, going back 20 years. 


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