Ballmer Uncloaks ‘One Microsoft’ Organisational Overhaul

Microsoft CEO Steve Ballmer announced plans for a significant strategic overhaul of the company today, which brings various units together to create a tighter organisation.

Ballmer listed eight new divisions: engineering, marketing, business development and evangelism, advanced strategy and research, finance, HR, legal, and COO.

But it seems a key focus for Ballmer is ensuring future success of Windows, in its myriad forms. Having seen Windows 8 take something of a battering from certain critics, and its Windows Phone struggle compete against iOS and Android, Microsoft is responding by tying all its operating system teams into one place, within the engineering division.

Microsoft wipes its smeary Windows

The engineering division is where Microsoft’s products will get built, and it has four main groups within it. The Operating Systems Engineering Group led by Terry Myerson, will cover Windows on all platforms, from gaming consoles, mobiles, PCs and back-end systems like Windows Server.

Cloud services related to operating systems will also be put into the operating systems group, in a bid to clean up Microsoft’s messy OS strategy and foster what Ballmer described as an “engineering culture”.

Analysts are impressed with the move, but grumble that it could have come sooner.

“This is a pretty significant change,” Gartner analyst David Cearley told TechWeekEurope. “Bringing those things together under Myerson… will set the stage for a much better client experience.

“It will drive greater synergy across the Windows market.

“Arguably, if they’d done this sooner they would have been in a better position today.”

Alongside the operating systems group, the division also includes  a devices group, which  will look at hardware development, for devices such as the Surface, and supply chain “from the smallest to the largest devices we build”, Ballmer noted in his memo to all Microsoft staff today.

Applications like Office, Sharepoint and the rest make up the third group within the engineering division.

The fourth group holds the other parts of cloud services, apart from the underlying operating system.

Some have taken Microsoft’s four-pronged engineering push as a sign it will distance itself from its device manufacturer partners, but Myerson does not think this is the case.

“We could see them expand somewhat on the hardware front but I don’t expect them to become a complete hardware provider,” he added.

“I think they will pick targeted niches that will see them showing off their operating system.”

Ballmer admitted it would take some time to complete the transition to a tighter unit. “We will consolidate our technologies coherently into these groups pulling together some things that have been spread out in our current BG structure like cloud infrastructure, operating systems, mail, and identity, to name a few,” he said.

“Completing this process will take through the end of the calendar year as we figure things out and as we keep existing teams focused on current deliverables like Windows 8.1, Xbox One, Windows Phone, etc.”

Time to execute, Steve

There were few casualties amongst the various management changes. Kurt DelBene, a key member of the Office team, is to retire, whilst Ballmer’s senior advisor Craig Mundie is stepping down from the leadership team to do a “special project” for the Microsoft CEO.

“I would give Steve [Ballmer] high marks for vision in terms of regrouping and setting strategy, but the next issue is one of execution,” Myerson said.

Ballmer has faced calls for his resignation before, even though Microsoft remains a hugely popular company. Many have pointed to the company’s inability to steal a decent share of the mobile market, in the face of innovation from Apple, Google and others, as a reason for a change at the top.

Yet Ballmer is convinced he can turn things around with his biggest management shake-up to date.

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