A new Microsoft: Major reorganization puts focus on hardware, services


(SEBASTIAN KAHNERT/EPA)
July 11, 2013

Microsoft is moving into a new era, announcing Thursday that it’s reorganizing the company to focus on two major areas: devices and services.

In a sweeping memo to all employees posted to the company’s Web site, Microsoft chief executive Steve Ballmer outlined a “far-reaching realignment” that he said will help the company keep pace with a “fast changing world” and pulls Microsoft from a collection of siloed divisions into a more cohesive company.

It’s no secret that Microsoft is in a period of transition, brought on by challenges such as slumping PC sales — Gartner reported Wednesday that sales in the sector had slipped 11 percent from the last quarter. To combat that slide and push back against competitors such as Apple and Google, Microsoft has launched several new initiatives, including a move into hardware with its Windows Surface tablets. The company has also been putting more energy in promoting its software — particularly cloud-based software — as an ecosystem of products that also works with other company’s services, smartphones and tablets.

Continuing down that track, Ballmer said, requires a bigger shift at the top.

“This company has always had a big vision — to help people realize their full potential,” Ballmer wrote. “In the earliest days, it was by putting a PC on every desk and in every home. We’ve come farther than we could have imagined.”

The reorganization has shuffled several top executives. Former Windows Phone chief Terry Myerson is now in charge of all operating systems engineering -- for consoles, mobile devices, PCs and back-end systems, including Microsoft’s important cloud services.

Julie Larson-Green, who has been the co-chief of the Windows unit, is now in charge of hardware development , such as the Xbox game console and Surface tablet. She will be responsible for getting games, music and video onto those devices.

The company’s application development now falls under the direction of Qi Lu, formerly the head of Online Services. Database and data systems work will be directed by Satya Nadella, previously the head of Microsoft services and tools.

Microsoft has already been showing off a new attitude. At its Build conference last month, the firm not only name-dropped mentions of partner companies such as Facebook, Flipboard and Box, but developers also demonstrated how some of Microsoft’s products work for Apple’s iPhone and Mac computers. There was no audible gasp or rending of hair over seeing a product from Microsoft’s old rival onstage. But it was still strange enough for Aaron Levie, Box’s chief executive, to comment that he half-expected Microsoft co-founder Bill Gates to swoop down from the ceiling and knock the Mac off the stage.

But expanding the ways in which consumers can access and use Microsoft products is clearly the biggest priority for Ballmer. The CEO has said several times that the company needs to pull its efforts together to make sure that it can serve its customers and help them do “the activities they value the most.”

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Hayley Tsukayama covers consumer technology for The Washington Post.
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