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Microsoft shakes up the exec org chart as Myerson climbs, Elop falls

Gregg Keizer | June 18, 2015
CEO Satya Nadella turns back the clock to 2012 by combining devices and Windows into one group under Terry Myerson.

"A reorganization is never really done," Moorhead argued. "Companies in high tech are especially in a perpetual state of reorganization."

Again, Helm had another take. "This is the start of the Nadella era," Helm said. Nadella took the CEO office in February 2014 after a several-months search that some believed would result in the appointment of an outsider, not a 22-year insider.

Several long-time lieutenants of Ballmer and co-founder Bill Gates before that were put in place to provide advice to Nadella, Helm said. But many of them have since moved on; the removal of others today was simply another part of the same process.

"Nadella started with the organization that he was given, but he's now put his own stamp on it," said Helm.

Several top-level executives will leave the company in the coming months, Nadella said today, as fallout of todays' moves, including Elop; 25-year veteran Eric Rudder, vice president of advanced technology and education; and Kirill Tatarinov, who had been running Dynamics.

Also out: Mark Penn, the former political advisor who joined Microsoft in 2012, ran the anti-Google Scroggled campaigns, and was most recently the company's chief insight officer, a role that was never clearly defined. Penn will found a new digital marketing equity firm, Stagwell Group, that has raised $250 million in capital, some of it from Ballmer's billions.

Kurt DelBene, who was pushed out in 2013 by the Ballmer reorg but brought back by Nadella in April as the head of corporate strategy and planning, will continue in that role.

Neither Moorhead nor Helm viewed the changes as indicative of a switch in strategies at Microsoft. Nadella's email, in fact, trumpeted the same mantras that have become writ at the company, including "productivity services and platforms" and "mobile-first, cloud first world."

Although Wall Street has often urged Microsoft to divest itself of the Nokia business, there was no clue of such a move in today's executive game of musical chairs, said Moorhead.

"What will be interesting, though, is who leads the hardware under Myerson," Moorhead said. "Microsoft needs a star hardware person. If they do that, then no, [Microsoft won't dump Nokia]. But if they put a long-time software person under Myerson [to head hardware], then maybe."

Earlier this year, Microsoft filed documents with the U.S. Securities and Exchange Commission (SEC) that implied the company would soon take a massive write-off of its Nokia acquisition that could run into the billions.

According to The Verge, Jo Harlow, a former Nokia executive who came with Elop to run Microsoft's phone business, will also leave Redmond.

Nadella's high-level strategy remains intact, Moorhead maintained. Today's changes were of a tactical grade. "But the mobile and cloud strategy may or may not include a hardware business," Moorhead said.


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