Re-org Rumor Mill Continues As Ballmer Finalizes Plans

A new report suggests that Microsoft could reveal its re-org plans as early as Thursday.  Ballmer is restructuring the company around the vision of devices and services, further divided into consumer and business/enterprise sections.  Here is what we believe Ballmer’s current plans are:

Winners

    • New cloud computing and business-focused products unit headed by current Servers & Tools head Satya Nadella;
    • Online Services leader Qi Lu could add Microsoft Office and other apps to his portfolio that already includes the Bing search service;
    • Julie Larson-Green, who now co-heads Windows efforts, is in line to be in charge of all devices from Surface to Xbox, as well as music and TV services;
    • Windows Phone chief Terry Myerson is expected to take over Windows engineering and platforms.
    • Meanwhile, Windows CFO and CMO Tami Reller is expected to have a larger marketing job;
    • Skype president Tony Bates gets purview over all of business development, corporate strategy and M&A, playing the role of outside guy to Silicon Valley and developers (complete with a giant checkbook for acquisitions and other investments).

While Nadella, Lu, Y Bates are well established in their fields I’m concerned about Reller, Myerson, & Larson-Green.  For someone taking a larger marketing role, Reller is a complete disaster when giving interviews or presentations.  She also lost out on becoming overall CFO to Amy Hood.  Larson-Green came up as Sinofsky’s right hand girl, dating back to the Office days in pushing bold UI ideas.  It will be interesting to see if she can be an actual leader, or was just a useful tool.  Larson-Green is not great at interviews or presentations either.  Frank Shaw recently had to clean up Reller’s & Green’s mess in Windows 8.1 announcements.  I have not been impressed by Myerson’s lead with Windows Phone.  Andy Lees took the fall for many of Myerson’s mistakes there.  Where Lees will end up is still an unknown, he is currently on leave in London.

 

 Losers

  • Microsoft Office president Kurt DelBene (either leave the company or new boss is Qi Lu)
  • Microsoft Business Solutions president Kirill Tatarinov (either leave the company or new boss is Satya Nadella)

Neutral

  • COO Kevin Turner, sources expect he’ll stay (at least until he is offered a tasty and big operationally-heavy CEO job outside the company)
  • Current CFO Amy Hood, recently got her job replacing Klein, will stay in place, may have more units report to her.  Previously she helped spear-headed some big acquisitions including Skype & Yammer, Tony Bates will now be in charge of mergers and acquisitions.  Former Goldman Sachs executive.
  • HR head Lisa Brummel stays in place, had some input in the re-org
  • Chief lawyer Brad Smith stays in place

According to Kara Swisher:

Interestingly, Hood might have to deal with one big change that Ballmer has been contemplating that would mash up all the divisions — which had previously reported their financial performance separately — into a different version of its current P&L.

This would be a big deal to Wall Street and investors if it happened, since it could shield the company from complaints about its money-losing units like Bing, that are still integral to the company. It could also make its finances less transparent. But any such changes, sources cautioned, could take some time and could require regulatory approvals.

Another interesting part of the restructuring is the help and advice that Ballmer has gotten from longtime colleague Alan Mulally, CEO of Ford. Insiders said Ballmer has told them he has tapped the much-respected exec, who has been adept at turnarounds at big organizations, for ideas about how to structure Microsoft for the next years ahead.

When Mulally was named to the Time 100 list in 2009, in fact, it was Ballmer who wrote about him for the magazine, noting, “[Mulally] understands the fundamentals of business success as well as any business leader I know.”

And, of course, Ballmer loves Ford — his father was a longtime exec there and he is from the Detroit area.

 

We know also that Bill Gates has worked with Ballmer on the re-org, and Ballmer has the full backing of the board to proceed.  Ballmer is also looking at his legacy and potentially retiring after the next decade.  The re-org could allow a natural successor to emerge from within the company.  We previously reported on high profile executive Don Mattrick leaving to become CEO of Zynga.

So what does this mean for consumers?  Mostly nothing.  Re-orgs take time to reach their full effect and many times do not shake out the way they intended to.  You may remember that Gates choose Ray Ozzie to succeed him, but eventually Sinofsky gained the upper hand.  Re-orgs used to be an annual occurrence under Gates, but stopped being as frequent after Ballmer took over.  While this restructuring may amount to little in the short term, for those of us who watch the company closely this is fascinating inside baseball.  Stay tuned for more coverage as we learn more.

Source: AllThingsD

About the author  ⁄ Suril Amin

Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin

  • Haymo

    Nice article, much better information than other sites I read about Microsoft’s restructuring.

    • Paloma_Pastiche

      I agree there’s more insight in this article.
      BTW, I got this page from a link within wmpoweruser.com: when clicking the headline on that site, please link direct to Microsoft News.
      At the moment, when clicking the headline, it links to a useless secondary page on wmpoweruser.
      This is annoying and pointless.

      • http://twitter.com/surilamin surilamin

        I’ll check if it’s possible to change this.

  • Agosto Nuñez

    This will have a major (and positive) effect on Microsoft’s products, devices and services, I can’t wait for Microsoft’s new direction.

    • frankwick

      Agree, but I’m still not impressed with Ballmer as a CEO.

  • http://www.favbrowser.com FavBrowser.com

    That woman will be a disaster for xbox, surface and everything she touches

    • frankwick

      I don’t have an opinion on JLG, but I do not blame her for the Win8 debacle. I blame Sinofsky for that. She has done good things with trying to repair 8.1. What’s wrong with JLG?

      • http://twitter.com/surilamin surilamin

        JLG designed both the office ribbon and windows 8.

  • frankwick

    This “Windows Phone chief Terry Myerson is expected to take over Windows engineering” is good and bad. I think the engineering of WP8 is so much better than Windows 8. On the downside, The Windows team is moving much faster than the Phone team now.

  • BugBug

    This is Ballmer first acknowledgement that MSFT is messed up and need of a fix. Problem is rearranging the deck chairs is not the solution when the problem is a bad CEO. Ballmer has been clueless seeing trends and then late to react when they become obvious. The only thing that save him is the MSFT has deep pockets to try to buy their way out of the hole Ballmer has put them in. It no way to run a business and a great way to ruin shareholder value.