Here's the way Microsoft now thinks of its business: as a company providing operating systems, apps, the cloud, and devices. Let's look at each one, briefly.
1.) The Operating Systems Engineering Group
As Ballmer noted, Terry Myerson will run the OS Group, and it will "span all our OS work for console, to mobile device, to PC, to back-end systems," Ballmer wrote, including the "core cloud services for the operating system." That last bit could be interpreted as something akin to SkyDrive, or it could be indicative of a more profound change, such as an incredibly thin, connected OS that loads up modules from the Internet as needed onto devices with limited hardware resources.
A cohesive OS strategy will also undoubtedly result in closer ties among Windows, Windows Phone, and the Xbox, with extremely positive implications for apps and user interfaces.
2.) The Devices and Studios Engineering Group
This is more of a puzzler. Julie Larson-Green will oversee all hardware development and supply chain operations (think component purchasing) for all Microsoft devices, like the Surface and Xbox. But she'll also have control of all of Microsoft's "studios" experiences, such as its game development, music, video, and entertainment.
Not to slight Larson-Green, but this seems to put a lot on her plate. Games go hand-in-hand with the Xbox, true, but breaking out a Devices Engineering Group for Microsoft hardware and a Studios Engineering Group for creative work seems like a more natural division of labor. Perhaps we'll see this group fracture if Microsoft's investments in either increase.
3.) Applications and Services Engineering Group
Qi Lu who ran Microsoft's money-losing Online Services division where Bing resided, will now stash Bing inside a business that will presumably include Microsoft Office, a traditional money-maker for Microsoft. Lu will be responsible for "core technologies in productivity, communication, search and other information categories," code for Office, Skype, and Bing. One question is who will be responsible for traditional Windows 8 and Windows Phone apps like Mail or People; they're traditionally tied to the OS, but are also developed along their own timelines.
4.) Cloud and Enterprise Engineering Group
Satya Nadella will lead development of Microsoft's back-end technologies like its datacenter, database and specific technologies for enterprise IT and development tools. He will also lead Microsoft's datacenter development, construction and operation.
We can probably assume this means Nadella will continue to be responsible for Azure, and for tying it to the datacenter hardware that Microsoft uses to power its own cloud services. It's hard to believe that Nadella won't be contributing to Myerson's work, ensuring that enterprises continue to influence the direction of Windows Server. But Nadella will apparently be responsible for the back-end database stuff, which will likely include Outlook.com and possibly SkyDrive.
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