Microsoft set for major company reorganisation?

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All Things D and Bloomberg report that Microsoft is pondering a major company reorganisation that would see the company restructured around devices and services, with an underlying aim of creating a simpler management structure more suited to the challenges Microsoft faces in the years ahead. 

The changes are reported as not being final and subject to change, but it appears the restructuring will reduce the number of business units at Microsoft, with an operating systems unit that would see Windows and Windows Phone in the same business division for the first time, under the joint leadership of Terry Myerson (current head of Windows Phone) and Julie Larson-Green (current head of Windows engineering). 

All Things D reported on Monday that the reorganisation would see larger roles for several current executives including Satya Nadella (President Server and Tools division), Tony Bates (President of Skype division), and Don Mattrick (President of Interactive Entertainment division), but noted it was unclear how the changes would impact other executives.

Bloomberg followed on from this report on Tuesday in a story that added Qi Lu (current head of the Online group) to the list of executives expected to get more senior roles, and noted that the aim was to enable Microsoft to better compete against Google and Apple. 

Bloomberg further noted that one idea would see a new structure with four divisions, down from the current eight:

One idea under consideration by Ballmer would create four divisions: an enterprise business led by Nadella; a hardware unit overseen by Mattrick; an applications and services division under Lu; and an operating-systems group jointly led by Terry Myerson, Windows phone chief, and Julie Larson-Green, head of Windows engineering, said one person. Bates would also be given a significant role, said the person.

The new structure would very much fit in with the idea of Microsoft as a services and devices company, something that was talked about by Microsoft's CEO, Steve Ballmer, in a letter to share holders in October of last year:

"In all our work with partners and on our own devices, we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services. This means as we, with our partners, develop new Windows devices we'll build in services people want. Further, as we develop and update our consumer services, we'll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily. So right out of the box, a customer will get a stunning device that is connected to unique communications, productivity and entertainment services from Microsoft as well as access to great services and applications from our partners and developers around the world."

As we noted at the time, this shift from a pure software company to one that is based around device and service experiences is something that chimes with the direction that smartphones are headed to:

The idea of one platform, Windows, and the importance of the cross-device user experience is particular notable for the smartphone domain. The idea of smartphones as singular devices is rapidly retreating, and is being replaced with a recognition they are part of a greater whole. That has significant implications for both how the devices and their accompany services and software are built, and how consumers can expect to use such devices in the future.