Microsoft Rearranges Windows Managers

By Sara Kehaulani Goo
Washington Post Staff Writer
Friday, March 24, 2006

Microsoft Corp. announced a major shakeup in its Windows division yesterday, just 48 hours after it disappointed consumers and PC makers with a delay of its next operating system, Windows Vista.

The Redmond, Wash., software giant promoted a longtime manager of Microsoft Office, Steven J. Sinofsky, to take the helm of planning for future versions of Windows operating systems as head of the Windows and Windows Live group. James E. Allchin, a longtime Windows executive and the co-president of a broader division that includes Sinofsky's group, will step down at the end of the year in a previously announced retirement.

The move signals a recognition among top executives at Microsoft that the company needs to improve the delivery of its products and the relationships with its biggest partners, including PC makers that have been frustrated by delays in the new Windows Vista schedule, said tech analyst Rob Enderle.

More broadly, Microsoft's leaders concede that they need to remain agile against new competitors online, such as Google Inc., and still deliver on the company's core product offerings.

"They put in a number of their top assets to really turn the group around," Enderle said. "Going forward, they have a team that can execute and meet their dates."

Microsoft made the announcement yesterday morning in an e-mail sent to employees by Kevin R. Johnson, leader of the platforms and services division, and plans to hold a meeting for workers today. "These changes are intended to help us increase our agility, embrace the concept of software + services, and position us for an exciting future together," Johnson wrote.

The restructuring at the top has been long in the making; last fall, Microsoft chief executive Steven A. Ballmer announced a broad reorganization of the company's business groups in an effort to "enhance decision-making and speed of execution, as well as help us continue to deliver the types of products and services our customers want most."

Johnson was assigned at that time to serve as co-president of the newly created platforms and services group, which includes MSN.

Internally, some Microsoft employees have become worried that the software giant is bogged down by its own size as it faces competition in a broad array of areas, from online products offered by Google, Yahoo Inc. and America Online Inc. to gaming competitor Sony Corp.

"I have had the opportunity to conduct more than one hundred 1:1's and have met with over 2,000 of you at all-hands meetings and roundtables. Not surprisingly some common themes have emerged," Johnson stated in his memo. "Your questions, concerns and feedback, taken together with the dialogue within our leadership team pointed to the need to address three key questions for our division: What are the next steps for advancing our vision of software + services? Are there growth opportunities upon which we should be more focused? How can we be more agile?"

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