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Sea change in Microsoft's focus may force restructure of leadership

Ian Paul | June 5, 2013
Microsoft reportedly is headed for a major organizational restructuring as the company continues its march toward becoming a devices-and-services company.

The mythical perfect living-room box hopefully would offer gaming, DVR recording, a digital TV guide, online streaming from services like Amazon and Netflix, as well as integration with your PCs, smartphones, and tablets, and a wealth of TV-centric apps. The Xbox One has almost all of these features, minus the DVR, which may be added at a later date.

While Microsoft appears to be planning for a future where Xbox plays a major role, some analysts are calling for the company to sell off its gaming platform/set-top box. Recently, Nomura Equity Research analyst Rick Sherlund called for Microsoft to sell Xbox and Bing .

Where are the devices?
But in Microsoft's purported Azure-Skype-Xbox future, where do devices like the Surface come in?

Even though Windows is struggling to gain popularity among users, Microsoft's Surface is far and above the most popular Windows tablet there is. Microsoft's Windows 8 and Windows RT tablets made up half of all Windows slate sales during the first three months of the year, according to IDC (full disclosure: PCWorld and IDC are both owned by International Data Group).

Those sales also catapulted Microsoft into fifth place among the top tablet vendors worldwide.

With that kind of moderate success to build on and a proclaimed "devices-and-services" future, it makes sense to have somebody heading the devices sector of your company.

Perhaps under Ballmer's final plan, Mattrick and Nadella will head up the devices-and-services divisions, with Bates playing a significant role within the services sector.

Or maybe the three execs will be on equal footing, with a fourth person heading up devices like the Surface.

What about Windows?
The big question, however, is where Windows fits in under all of this. That appears to still be under debate, according to AllThingsD.

Windows is still a key component of Microsoft's business, and the desktop OS can't really make the jump to becoming an online service the way Microsoft has done with Office 2013.

Then again, there were rumors about a cloud-based version of Windows for businesses that could make its way to consumers in the coming years. So maybe thinking of Windows as a service isn't such a far off idea after all.


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