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Microsoft undergoes sweeping reorg for product focus

Mark Hachman | July 12, 2013
Microsoft consolidates power in a few major executives, as the company refocuses itself on the "devices and services" vision Steve Ballmer previously described.

Microsoft chief executive Steve Ballmer reorganized Microsoft, as expected, eliminating the "silos" of product groups and giving responsibility to key executives in charge of key technologies.

The goal, Ballmer said, was to eliminate goals by division and share technology and responsibilities across the company. While Microsoft's moves are a business decision with the goal of making the company more responsive and decisive, the end goal of the company hasn't changed, Ballmer said:

"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 that was made public.

In the past, Microsoft organised its business around product groups, meaning that its mobile business, for example, was ultimately responsible for developing and fine-tuning the Windows Mobile and Windows Phone operating systems that powered third-party smartphones, while the Windows group oversaw the OS and apps for desktop and mobile PCs.

Now, under the new strategy, Terry Myerson will lead the Operating Systems Engineering Group, responsible for not only for all the OS work, from consoles to mobile devices to PCs to back-end systems, but also the cloud services specifically used by the operating system.

"Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do," Ballmer wrote. "We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders. All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers."

Ensuring that a company the size of Microsoft remains responsive to the demands of customers and the market is something that major corporations wrestle with daily. For Microsoft, which has already performed a do-over with Windows 8 and with its Xbox One DRM strategy, the challenge will be to see these obstacles in its path and nimbly dodge them.

"Microsoft's reorg will help the company to maximize their assets by having new business units focus on common story, delivering one experience, Carolina Milanesi, an analyst with Gartner, said via Twitter. "Working as one company is a huge culture change for Microsoft and to do it in a timely manner for every decision is going to be its biggest challenge."


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