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Will a bigger leadership pool right the ship -- and what will become of current top brass?

All Things D's Kara Swisher is reporting:

According to sources close to the situation, Microsoft CEO Steve Ballmer is likely to unveil his plans to restructure the tech giant to a larger group of senior execs by July 1.

The report is not altogether unexpected.  Microsoft Corp. (MSFT) has been struggling to appease consumers -- be it the embarrassing abandonment of digital rights management (DRM) plans for the Xbox One and the company's struggles to repair the Windows brand's image with Windows 8.1, the successor to a poorly received makeover.

I. Microsoft Shifts Gears

But the change also owes to a deeper shift at Microsoft from a company of discrete software products to a "devices and services" model.  

The latter ("services") part of chief executive Steve Ballmer's vision reflects on a broader industry-wide trend.  While onerous to offline users, increasing connectivity has allowed companies like Adobe System Inc. (ADBE) to transition their software portfolios to subscription services.  Advantages of this approach include the ability to provide licensed customers with universal access, the removal of user troubleshooting, and the ability to quickly deliver updates/improvements/patches.

Steve Ballmer
Microsoft CEO Steve Ballmer [Image Source: Bloomberg]

The former ("devices") is more unique to Microsoft.  Like Apple, Inc. (AAPL) or Google Inc. (GOOG), Microsoft has found that its software experience has granted it the vision to design products that in some ways are more appealing than those of primarily hardware firms like Dell, Inc. (DELL) or Hewlett-Packard Comp. (HPQ).

While the Surface tablet-laptop convertible has fallen short of its sales expectations, it was also perceived -- in spite of its flaws -- as a stylish and utilitarian embodiment of the potential of Windows 8.  Emboldened by that success Microsoft is reportedly considering a similar approach in the smartphone market.  

Microsoft's efforts are a hybrid of Apple and Google's.  Unlike Google, it does not contract third party OEMs for its branded products; but unlike Apple it does not lock out third-party designs.  Like Google, the Microsoft-branded devices seek to illustrate the company's vision for hardware-software integration for a specific operating system release, while like Apple they're designed to raise the bar on quality over baser OEM fodder.

With that in mind, the shift is also motivated -- to an extent -- by the desire for self-preservation.  Some shareholders have called for Mr. Ballmer to step down due to Microsoft's recent stumbles and low share prices.  But Mr. Ballmer still has some leverage -- he's served as CEO for almost a decade and a half and has the blessing of Chairman Bill Gates who founded the company.  Bill Gates chose to anoint Mr. Ballmer as the company's new leader, and that makes displacing him difficult -- to say the least.

With a shakeup, Mr. Ballmer can use that leverage to hang onto his top position, showing investors he's willing to change the formula when the fit is poor.

II. Some Top Executives May be Booted

Microsoft today is full of young faces.  The company lost Robbie Bach and J Allard -- two veterans from the fruitful 90s -- due largely to the company's unwillingness to productize the Courier, a slick tablet design that Microsoft hatched pre-iPad in 2009.  After Apple's iPad became a massive hit, J Allard and Mr. Bach reportedly left in disgust.

The man who killed Courier -- Steven Sinofsky -- was also booted from the ship last year, ultimately, vindicating Mr. Allard and Mr. Bach's vision.  The decision to expand Microsoft's executive ranks would likely have displeased Mr. Sinofsky greatly as he spent much of his career at Microsoft trying to cut down on excess management, which he viewed as unhealthy redundancy.

Other prominent Microsofters to leave include Nathan Myhrvold, who now heads "patent troll" Intellectual Ventures; former Business Division President Jeff Raikes, who left to serve as CEO at Bill Gates' charitable foundation; former Windows co-president Kevin Johnson who became CEO of Juniper Networks Inc. (JNPR); and of course long-time CEO Bill Gates.

Steven Sinofksy
Windows President Steven Sinofsky was the company's most prominent executive ousting to date. [Image Source: ExtremeTech]

A source says the upcoming changes are designed to shake up the ranks of Microsoft's young guns and restore the kind of management that propelled the company to success in the 1990s.  Comments the source to All Things D, "It feels like it is going to be titanic — that Steve is doing this change for his legacy.  And it’s the first time in a long time that it feels like that there will be some major shifts, including some departures."

Among those who the sources say may be either promoted -- or on the flip side kicked off the ship -- include Satya Nadella, president of Microsoft’s Servers and Tools division; Tony Bates, president of its Skype communications unit; and Don Mattrick, president of its Interactive Entertainment division (which includes the Xbox business); Qi Lu, president of Microsoft’s Online Services unit; and CVP Terry Myerson, who runs the company’s Windows Phone division.

Microsoft presidents
Microsoft's (left to right): Satya Nadella (Servers and Tools), Tony Bates (Skype), Don Mattrick (Interactive Entertainment) will likely see their roles shift.

The big question is whether the changes -- ranging from the creation of new positions to firings to shuffling -- will be announced before, after, or at Microsoft's annual BUILD Conference for developers, which runs this week from June 26 to 28.

Source: All Things D

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Microsoft misses the target every time
By tayb on 6/24/2013 1:52:58 PM , Rating: 1
Microsoft seems to have some great ideas they just always take it way too fucking far and miss the target every single time.

Windows 8 is an awesome OS. It's faster and they added a lot of features that I use often. But they had to force the modern UI on everyone and everything and Windows users cannot adapt to change. They should have created a tablet UI (modern UI) and a desktop UI (traditional desktop) and separated them. If you're on a tablet you default to modern UI, a notebook you choose, and on a desktop you default to the traditional desktop. Switch if you want.

Xbox One had a great concept. Download games and install them onto the HDD? Great... instant gratification a la Steam. Share games with friends? Amazing. HDMI pass through? Wonderful. Exclusive games? Fabulous. Online check-in every 24 hours and no used games?? THE FUCK WERE YOU THINKING?? This is another scenario where Microsoft could have EASILY had the best of both worlds. Buy a disc and you get an experience exactly like the 360. Download a game digitally and you get the digital experience.

Windows RT... is great. As an alternative to an iPad or an Android tablet it is great. It comes with Office which makes it infinitely more usable as a work device than iOS/Android could ever imagine. The app selection isn't up to par but most people wouldn't notice. With 8.1 it will come with Outlook which was the main hurdle for me. And yet they fucking named it Windows RT instead of "Windows Tablet" or "Windows Touch" and gave users access to a desktop environment that was worthless and confusing. WHAT THE FUCK? Then they did an absolutely horrendous job marketing and educating consumers on what the product was and what made it superior to Android/iOS.

Surface RT/Pro are pretty awesome tablets. The Pro is actually the best tablet I've ever used. But Microsoft got greedy and overpriced them each by about $200. A Surface RT at $299 and a Surface Pro at $699 would have sold much better. But no, Microsoft decided to price the tablets at Apple levels and hope consumers would trust their untested products and untested OS. To the shock of no one outside of Microsoft the products were flops.

Windows Phone. The UI is my favorite among all mobile OS vendors but they are slow to update it, slow to roll out new features, slow to do everything. Then they try to sell Windows Phone to make some money as opposed to giving it away for free to help gain market share. Then they shit on early adopters by killing WP7.8 (or whatever they called it). Now the UI is no longer unique to Windows Phone and seems a bit dated. They missed the opportunity. Squandered it with their own stupidity. And what are they doing with Windows Phone 8.1? No idea. No one knows or even cares.

Microsoft is so fucking close to having some killer products but they just absolutely fuck up the details. I have no faith that in the future they will solve this.

By nightscooter on 6/25/2013 8:16:27 AM , Rating: 2
Totally agree.
Personally I love windows 8, saying that I am well aware of its flaws. For me they are not too big of a deal but I can understand that this is not the case for many. It was dumb not giving people the option of having a traditional desktop if that is their preference. Forgetting the start menu even a boot to desktop option would have been something.
Plus whoever was responsible for the windows 8 tutorial should be stripped of all privileges immediately.

I was also really looking forward to the xbox one but again can see why it upset a lot of people. I could care less if they checked in every 24 hours, for me it was worth it to have the new features.
It would have been easy to keep the old method for discs & have the DRM features on digital downloads for people who want them. Instead they made almost exactly the same mistake as the did with Windows 8. It is like they are trying to piss people off on every platform.

It's cool that they are trying different things but they need to understand their users & give them the choice & let them change when they are ready.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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