Microsoft’s Applications Software Unit Split Into 5
Microsoft on Thursday reorganized its applications software division into five business units to streamline product development and prepare for anticipated growth.
Applications programs, which perform such specific tasks as word processing and accounting, contributed 40% of Microsoft’s $590.8 million in revenue in the fiscal year ended June 30.
Although Microsoft, aided by its near monopoly in operating systems for IBM-style personal computers, last year surpassed Lotus Development to become the largest maker of personal computer software, the company still lags behind Lotus and Ashton-Tate in applications software.
The restructuring comes at a time the key rivals of Redmond, Wash.-based Microsoft appear vulnerable. Both Lotus and Ashton-Tate have encountered snags in releasing new versions of their application software programs.
“Our goal is to become the No. 1 company for applications software,” a Microsoft spokeswoman said. “We have not yet had a killer” in that category, she added.
IBM software veteran Mike Maples, who joined Microsoft as vice president of applications three months ago, will oversee the newly restructured division. Each business unit reporting to him will have responsibility for its products from conception and development through introduction and continuing marketing.
Maples, in an interview, said the restructuring was to “prepare for the future, not to fix something that’s broke.” He noted that the company’s applications software revenue climbed 78% last year and profit grew 71%.
“We compete with a lot of companies that are essentially one-product companies, and this will allow us to sharpen our focus,” he added.
Microsoft’s current leading applications program, for both the IBM PC and for the Apple Macintosh computer, is its word-processing program, Word.
The five new business units are the office business unit, graphics business unit, entry business unit, data access business unit and analysis business unit. In addition, two staff groups--development support and user interface architecture--have been created and will be responsible for issues that cover all business units.
