After much prognostication by the media, Microsoft’s Steve Ballmer has finally announced the company’s long awaited corporate restructuring. The changes include what Ballmer called in a memo to Microsoft employees, “a far-reaching realignment around devices and services,” according to AllThingsD.
The restructuring, Ballmer said, will, “enable us to innovate with greater speed, efficiency and capability in a fast changing world.” The impetus behind the restructuring is to create what Ballmer referred to in the memo as “a single strategy as one company — not a collection of divisional strategies.” Prior to the announcement, Microsoft’s various divisions were essentially companies onto themselves. The new strategy calls for improved collaboration across divisions.
Ballmer said the new corporate structure will be based around four engineering units that include operating systems, applications and services, cloud and enterprise and devices and studios. With the restructuring comes a series of changes to the company’s executive team.
Current Windows Phone executive Terry Myerson will now head up the operating system division, which will include Windows and Xbox software and systems, while Windows co-executive Julie Larson-Green will take the lead on all of the company’s hardware development, which includes the Surface and Xbox, in addition to games, video and music content. Qi Lu, who is in charge of online services, will take over productivity, communications and search apps. Servers and tools chief Satya Nadella will take the lead on the company’s cloud business.
The changes to the executive team and the focus on a more collaborative effort across the company are huge steps for Microsoft, which has a history of issues when it comes to internal politics. Cross divisional rivalries and an uneasiness with working together have been problems for the company in the past, and Ballmer clearly believes such behavior has hurt the company.
Windows 8′s poor sales performance and the generally underwhelming critical reception the operating system received haven’t helped either. And with the Xbox One being panned for its digital rights management components, which Microsoft has already pulled back on, it seems the time is right for some serious changes at the company.
It will be interesting to see how the new corporate structure and executive realignment pans out for Microsoft, and if will be have any substantive impact on the company as a whole.