Ballmer announces sweeping Microsoft reorg


— 12:42 PM on July 11, 2013

The Microsoft we all know and love is about to undergo some seismic changes—hopefully for the better. In a lengthy memo this morning, CEO Steve Ballmer announced a broad reorganization meant to turn Microsoft into a more cohesive firm focused on "devices and services."

The memo is laden with enough corporate jargon and buzzwords to make it nearly inscrutable, but here are the main takeaways.

First, Ballmer says the new Microsoft will pull together "behind a single strategy" rather than a "collection of divisional strategies." To that end, the company will reshuffle itself into groups each tasked with a different facet of the company's operations—not a single product or brand. Those groups will include engineering, advanced strategy and research, marketing, COO, business development and evangelism, finance, legal, and HR.

Now, there will also be separate sub-groups within the engineering division. Those will include operating systems, devices and studios, applications and services, cloud and enterprise, and dynamics. However, according to Ballmer, the new Microsoft will seek to bring together "disparate engineering efforts" in order to boost engineer productivity and to spur "collaboration and contribution across the company." What Ballmer calls "major initiatives" within the company will "have a team that spans groups to ensure we succeed against our goals." Team leaders (or "champions") for those initiatives will report directly to Ballmer or to one of his "direct reports."

Microsoft's marketing efforts will also change. The company will strive to paint itself as a single company with "integrated approaches" and a "more coherent message and family of product offerings." In other words, the plan is for the company not just to act more cohesively, but to present itself as a more cohesive entity, as well.

As part of the reorganization, Microsoft's former Office chief Kurt DelBene will retire. The head of Microsoft Research, Rick Rashid, will step down from his role and go on to drive "core OS innovation" in the operating system engineering group. Also, Craig Mundie will devote 100% of his time to a "special project" for Ballmer. (The details of that project aren't mentioned in the announcement.)

Some other executives will continue on in different roles. Tami Reller, who took over business and marketing for Windows devices last year, will go on to lead Microsoft's new marketing group. Skype chief Tony Bates will be in charge of the business development and evangelism group, and former CTO Eric Rudder will oversee the advanced strategy and research group.

Within engineering, Terry Myerson, former corporate VP of the Windows Phone division, will head the operating systems engineering group. Julie Larson-Green, who has overseen Windows software and hardware engineering since last year, will now lead the devices and studios engineering group. Former online services chief Qi Lu will head the applications and services group, and former server and tools chief Satya Nadella will lead the cloud and enterprise group.

Prior to today's reorganization, Microsoft was split into five main, product-centric divisions: Windows, server and tools, online services, business, and entertainment and devices. As the Wall Street Journal points out, those units "have been known for sometimes acting at cross-purposes, competing for resources and not sharing technologies or moving as quickly as possible." The new structure should help the company overcome those issues. According to Reuters, however, some analysts worry that Microsoft's financial reporting may become less transparent, since its new business groups will no longer be tied to specific products.

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