Microsoft's units looks more concise, focused, but its rumored appointments are head-scratchers

According to All Things Digital, Microsoft Corp. (MSFT) CEO Steve Ballmer will announce his long awaited executive revamp on Friday in an effort to create "functional coherence" and reposition his firm as a "devices and services" provider.

Mr. Ballmer has reportedly tapped the experience and expertise of fellow CEO Alan Mulally, who steered Ford Motor Comp. (F) to a path of recovery and growth.  Mr. Ballmer has deep roots to the Detroit area where his father was a long time CEO.  A sign of how deeply Mr. Ballmer trusts Mr. Mulally lies in his offer to write the TIME 100 entry for the Ford CEO back in 2009.  In that entry Mr. Ballmer writes, "[Mulally] understands the fundamentals of business success as well as any business leader I know."

With Mr. Mullaly's help it's clear there's likely to be some serious and ambitious changes. Here's how those changes are expected to break down.

Ford CEO Alan Mullay gave Microsoft CEO Steve Ballmer a brand new Ford Fusion Hybrid in 2009 to celebrate the production of one million SYNC vehicles.

Old Units
  • Windows and Windows Live (Surface)
  • Windows Phone
  • MS Office
  • Online Services (Bing, MSN, etc.)
  • Servers and Tools
  • Business Solutions
  • Interactive Entertainment (Xbox One)
  • (marketing is spread over various units)
New Units
  • Windows (Windows 8.1, Windows Phone 8.1)
  • Hardware (Surface, Xbox One)
  • Software (Bing, MS Office, etc.)
  • Cloud and Business Products (Windows Server, Sharepoint, SQL Server, etc.)
  • Marketing (unified)
Microsoft Exec changes
Big Winners

Tony Bates
Where he was: President of Skype
Where he is going: President of business development, corporate strategy and mergers/acquisitions

Julie Larson-Green
Where she was: Windows CVP
Where she's going: President of Hardware (Xbox One, Surface, etc.)

Tami Reller
Where she was: Windows CMO/CFO
Where she's going: President of Marketing

Qi Lu
Where he was: President of Online Services
Where he is going: President of software (Bing, MS Office, and other apps)

Terry Myerson
Where he was: Windows Phone CVP
Where he is going: President of Windows

Satya Nadella
Where he was: President Servers & Tools
Where he is going: President of Cloud and Business Products

Holding Steady

Lisa Brummel
Where she was: Chief People Officer
Where she's going: (same)

Amy Hood (new)
Where she was: Chief Financial Officer
Where she's going: (same)

Brad Smith
Where he was: EVP, General Counsel
Where he is going: (same)

Kevin Turner
Where he was: Chief Operating Officer
Where he is going: (same)

Big Losers

Kurt Delbene
Where he was: President MS Office
Where he is going: Fired or demoted

Kirill Tatarinov
Where he was: President Business Solutions
Where he is going: Fired or demoted

Out Already

Don Mattrick
Where he was: President of Interactive Entertainment
Where he is going: CEO of Zynga, Inc. (ZNGA)


What do insiders think?  One quoted in the All Things D piece says, "If this is all about an org chart and not how to build great products, it does not matter what org chart Ballmer presents. Consumers buy products, not a management structure."

Personally, I feel this quote is true but misleading.  At the end of the day the shakeup -- if executed as stated above -- does constitute a serious reorganization at Microsoft.  From a units perspective it's brilliant.  Why have two or three separate units working on hardware?  Why have two operating systems units?  Why have multiple software units?  Why divide online and offline consumer software?

The new units look clean and concise.  Each unit has a clear purpose and builds on a key strength.  At the end of the day I'm pretty sure that will help products.

What worries me more are the people Microsoft is reportedly considering putting in charge of those units.  While [personally] I love Windows Phone and am neutral on Windows 8, I recognize that Microsoft has failed both in marketing and in taking criticism when it comes to products (see the faux return of the start button).  I don't get why you would boot/demote two of the Presidents of your most successful units -- MS Office and Business Solutions.

Tami Reller
Tami Reller led one of the most poorly received Windows marketing efforts in the OS's history -- Windows 8.  Should she really be put in charge of all marketing after that performance?  
[Image Source: WinSuperSite]

Probably the most baffling pick, though is Tami Reller.  If Windows 8 failed in one thing most of all, it was marketing.  Microsoft failed to explain its ambitious overhaul and failed to sell consumers on that vision.  To put that person in charge of all marketing is somewhat astounding to me.

In short, I feel Mr. Ballmer has his head on straight when it comes to the nature of the reorganized units, but when it comes to executive personnel it seems that some sort of politics or favoritism is afoot.  Perhaps some of the risers will turn around, but when you promote heads of mostly struggling units and demote heads of successful units, you're setting a troubling course.

Source: All Things D

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