Trying to gain some traction in a tech world increasingly driven by gadgets, and rapid refreshes of those gadgets, technology giant Microsoft Corp. is said to be on the verge of a major reorganization that would pare down its software production and business services to focus on hardware, like the Xbox One and its Windows-based Surface tablets.
A report by Goldman Sachs in December found that Microsoft's Windows operating system had slipped from 98 percent of all computing devices in 2000 to just 20 percent last year, and in the all-important market for mobile devices, Windows 8 and Windows RT are gaining some ground, but still far behind Apple's iOS and Google's Android.
A Shakeup in the Works?
According to two people who spoke confidentially to Bloomberg News, an executive shakeup within the Redmond, Wash.-based corporation would boost the role of Satya Nadella, currently head of Microsoft's server business, as well as Don Mattrick, who runs the Xbox division, which is shifting from a gaming platform to a TV content delivery portal.
Also heading up the ladder, the report said, are Qi Lu, the former Yahoo! exec who now heads Microsoftt's online services and Tony Bates, president of video-conferencing system Skype, which Microsoft acquired in 2011 for $8.5 billion.
On the way out, Bloomberg's sources said, is Andy Lees, who was put in charge of corporate development only last November.
Technology consultant Rob Enderle of the Enderle Group told us that Microsoft CEO Steve Ballmer told him years ago, after Ballmer became CEO in 2000, that he envisioned such a shakeup down the road. In the years since, however, Microsoft has been late to the game in jumping into smartphones, tablets and other important markets.
"He actually saw this trend happening back then but, I expect, he ran into internal resistance which slowed his execution substantially," Enderle said. "It wasn't that Microsoft didn't anticipate these changes -- they were into devices and mobile before Apple was -- it was they didn't execute well."
"Fixing the execution is where Ballmer has been focused but it has proven daunting because he isn't a programmer and likely has to accept more of what he is told than Bill [Gates] did."
Image Repair Is Priority
At the end of the day, Enderle said, Ballmer has been on target, especially in boosting the company's focus on cloud-based services.
"It is kind of amazing how long it has taken Microsoft to adopt the vision he had when he took the job," Enderle said.
Going forward, he said the company needs to reestablish client leadership, assure a continued major presence in cloud services, and reassert itself as a leader as it did in the '80s and '90s.
"They are making some progress on devices, but image is likely going to be the hardest to fix," Enderle said.
Posted: 2013-06-07 @ 8:52pm PT
Reorgs are never a good sign. It means that top level management has run out of all other management and strategic ideas and has no idea what to do that would actually be useful. Basically, reorgs are the last refuge of a failed and/or clueless manager.
Posted: 2013-06-03 @ 10:09pm PT
"Don Mattrick, who runs the Xbox division, which is shifting from a gaming platform to a TV content delivery portal."
Good one Adam...
You make it sound as if games are NOT their primary focus!