Microsoft Details Reorganization Plan
Calling it a “reinvention of the company,” Microsoft Corp. Chief Executive Bill Gates and President Steve Ballmer laid out details of the software giant’s widely anticipated reorganization into five divisions aimed at better serving its customers.
Although Microsoft has periodically reorganized itself, analysts said the latest effort could bring far-reaching changes in an organization facing such broad challenges as making computer software easier to use for consumers and more robust for businesses.
“This is not just reorganizing the deck chairs,” said Chris Le Tocq, an analyst at San Jose-based Dataquest. “It brings a long-needed focus on the customer.”
Analysts said the reorganization could help address a major flaw in Microsoft’s approach: the tendency to focus too much on new product features, then badgering customers to upgrade. Many Microsoft customers were outraged, for example, when the company released a version of its Office suite of productivity applications two years ago that created files that couldn’t be read by earlier versions of the software.
One goal of the reorganization is to improve the focus of MSN, Microsoft’s online effort. The Redmond, Wash.-based company’s failure so far to find an expert in electronic commerce to take over MSN could slow the creation of a new strategy, according to Dwight Davis, a Seattle-based analyst with Summit Strategies.
But Ballmer said the appointments of marketing whiz Brad Chase and technology star Jon DeVaan represent an important endorsement of the new online division. “We are in that game big-time,” said Ballmer. “The new talent will energize it even more.”
The reorganization is aimed at addressing what Ballmer calls Vision Version 2, a shift from evangelizing the spread of personal computers to a focus on making better use of the PC and other devices that access information.
Software developers will get a new division devoted to their needs, headed by group Vice President Paul Maritz. Gates said that later this year Microsoft would announce a product called Advanced Visual Studios that allows developers to write software once and have it run on a personal computer, a network server or the Internet.
The initiative appears to be a response to Java, a popular approach to producing software to run on a variety of computer systems. Developers have been unhappy about Microsoft’s vacillation over supporting Java.
Ballmer said the new developer division will also make a greater effort to let programmers write software for older PCs, an apparent response to Linux, a rival operating system to Microsoft’s Windows that is well-regarded for its ability to operate on the limited resources of older computers.
In addition to the online and developer groups, Microsoft will create a division aimed at information technology managers headed by James Allchin, a consumer Windows division headed by David Cole and a business productivity group headed by Bob Muglia. Most of the newly appointed executives have testified in the Justice Department’s antitrust trial against the company.
Ballmer discounted speculation that the reorganization might be a prelude to a spinoff of certain Microsoft divisions as a result of negotiations with the government.
“There is no breakup of the company that I would find acceptable,” Ballmer said.
