“One Microsoft” reorg aims to break down silos. Good luck with that

Microsoft CEO Steve Ballmer

The long rumored Microsoft restructuring is here and, frankly, it’s both bigger and less flashy than I expected, because most of this stuff has leaked already (thanks, AllThingsD). The goal is to get Microsoft thinking and acting like a single company — a mighty tall order for an organization famous for infighting.

Here are the the public statement and memo to employees. The main takeaway is that the company is organizing around functions, which include:

Engineering (including supply chain and datacenters), Marketing, Business Development and Evangelism, Advanced Strategy and Research, Finance, HR, Legal, and COO (including field, support, commercial operations and IT).

Engineering is broken out into four buckets: operating systems, application, cloud and devices.

Here are the big changes:

  • Terry Myerson, formerly the mobile guy, now owns ALL operating systems across console, mobile devices, PCs and back-end systems, and also core cloud services.
  • Julie Larson-Green, former VP of Windows, will head up hardware development and supply chain and Microsoft Studio aka Xbox — all the entertainment services.
  • Eric Rudder, who was CTO, has advanced strategy and research, trustworthy computing and Microsoft Research. Rick Rashid who ran MSR for CTO Craig Mundie (who is retiring), is now in Myerson’s OS group.
  • Qi Lu, who ran search, now is Mr. Office, heading up applications and services engineering. That’s a bit of a shocker. Former Office head Kurt Delbene has retired.
  • Tony Bates, who ran Skype, now has business development and evangelism, and could be viewed as Ballmer’s new right-hand guy, according to one Microsoft insider.
  • Amy Hood, who was just named CFO, stays in place but now runs a centralized finance organization. Before this, each of the business units had their own financial structures.

Many roles, despite all the hoopla, seem largely unchanged to me, but correct me if I’m wrong.

  • Satya Nadella continues to run cloud and enterprise engineering; Tami Reller consolidates her hold on a centralized marketing group assisted by former Clinton hand Mark PennKevin Turner remains COO; Lisa Brummel continues to head up human resources; Brad Smith retains legal.
  • Microsoft Dynamics — the business applications — will remain on its own and stay under Kirill Tatarinov as “it continues to need special focus and represents significant opportunity.”

I’m guessing these changes, while substantive, and which clearly take a swipe at erasing boundaries within the company, won’t put much of a dent into criticism of Microsoft’s tippy-top management (read “Steve Ballmer”).

But it is crucial that the changes take direct aim at a long-running Microsoft problem: Fierce political infighting (see org chart diagram below.) When I covered the company day to day, the best way to get dirt on Office was to ask the Windows guys and vice versa. Clearly, after decades of that, and faced with huge and capable (and well funded) competition — Google, Apple, Amazon et al., Microsoft can’t afford to let that behavior stand.

Manu Cornet, www.bonkersworld.net

Manu Cornet, www.bonkersworld.net

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