Microsoft enacted a structural overhaul and named a new 12-person senior leadership team with more for Windows boss Terry Myerson and an exit for Stephen Elop, head of its devices business.

DH Kass, Senior Contributing Blogger

June 17, 2015

3 Min Read
Microsoft: Myerson Rises, Elop Out in Strategic Overhaul

As if any doubt remained that Microsoft (MSFT) is chief executive Satya Nadella’s company to shape, the boss has enacted a wide-ranging structural overhaul and named a new 12-person senior leadership team that hands more responsibility to Windows head Terry Myerson and shows the door to Stephen Elop, head of its devices business.

“To better align our capabilities and, ultimately, deliver better products and services our customers love at a more rapid pace, I have decided to organize our engineering effort into three groups that work together to deliver on our strategy and ambitions,” Nadella wrote in a June 17 employee email the company made public. “The changes take effect today.”

Here’s the abridged version of Nadella’s handiwork:

  • The three engineering groups are Windows and Devices headed by Myerson, Cloud and Enterprise (C+E), led by Scott Guthrie, and Applications and Services (ASG), led by Qi Lu.

  • Windows and Devices is where much of the new action is taking place. The new group merges the vendor’s Windows platform with its hardware, namely the Surface tablets, Lumia smartphones, HoloLens, Surface Hub, Band and Xbox. It effectively combines engineering from the former OS Group and Devices Group under one roof with the residual effect of squeezing Elop out. “This new team brings together all the engineering capability required to drive breakthrough innovations that will propel the Windows ecosystem forward,” Nadella wrote.

  • The development teams that build Microsoft’s Dynamics products will move to C+E. The shift “will enable us to accelerate our ERP and CRM work even further and mainstream them as part of our core engineering and innovation efforts,” Nadella said.

  • Engineering efforts to build solutions for Education will move to ASG.

Here’s the fallout:

  • Elop, the former head of Microsoft’s business software unit before he jumped to the chief executive slot at Nokia before returning to run the vendor’s devices unit after Microsoft bought Nokia, is out, making it quite clear that its mobile plans have changed to revolve around Windows 10.

  • Former Nokia veteran executive Jo Harlow, an Elop report, who came to Microsoft with the Nokia acquisition to head its phones business, also is out, as The Verge reported and the vendor confirmed.

  • Kirill Tatarinov, who headed Microsoft’s $2 billion Dynamics business, is out.

  • Eric Rudder, a 25-year Microsoft veteran in its former Server and Tools business, Microsoft Research and most recently its advanced technology and education efforts, is out.

  • Mark Penn, Microsoft chief insight officer and marketing veteran, will exit in September to form a private equity firm focused on digital marketing services.

“I’ve worked closely with Stephen, Eric, Kirill and Mark and have incredible respect for each of them and wish them well,” Nadella wrote.

Here’s Nadella’s new senior leadership lineup:

  • Chris Capossela, Executive Vice President and Chief Marketing Officer

  • Kurt DelBene, Executive Vice President, Corporate Strategy and Planning

  • Scott Guthrie, Executive Vice President, Cloud and Enterprise

  • Amy Hood, Executive Vice President and Chief Financial Officer

  • Kathleen Hogan, Executive Vice President, Human Resources

  • Peggy Johnson, Executive Vice President, Business Development

  • Qi Lu, Executive Vice President, Applications and Services Group

  • Terry Myerson, Executive Vice President, Windows and Devices Group

  • Harry Shum, Executive Vice President, Technology and Research

  • Brad Smith, Executive Vice President and General Counsel, Legal and Corporate Affairs

  • Kevin Turner, Chief Operating Officer

  • Jill Tracie, Chief of Staff

“I’m counting on our Senior Leadership Team to inspire innovative products and services and lead excellent execution,” said Nadella. “Our competition and our customers don’t care about our organization structure–they care about innovation.”

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About the Author(s)

DH Kass

Senior Contributing Blogger, The VAR Guy

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