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 Channel Futures

Sales & Marketing


Steve Ballmer39s reorg is official Will Microsoft employees embrace it

Microsoft Reorg Memo: 10 Steve Ballmer Takeaways

  • Written by The VAR Guy 1
  • July 11, 2013
The Microsoft Reorg is official. CEO Steve Ballmer's memo was roughly 2,700 words and filled with lofty statements about cloud computing, devices, services, Windows 8, Office 365 and more. But what does it all mean for Microsoft's (MSFT) channel partners and customers? Here are 10 key takeaways.

The Microsoft Reorg is official. CEO Steve Ballmer's memo, published today, was roughly 2,700 words and filled with lofty statements about cloud computing, devices, services, Windows 8, Office 365 and more. But what does it all mean for Microsoft's (MSFT) channel partners and customers — amid fierce competition from Google (GOOG), Apple (AAPL), Salesforce.com, VMware (VMW) and more? Here are 10 key takeaways.

1. Devices and Services: Those are the two key focus areas for Microsoft going forward. But let's clarify the words. Services most likely means subscription services — not consulting services. As for devices, we're all familiar with Xbox and Surface tablets. Mr. Ballmer, when can The VAR Guy expect Surface Smart Phone?

2. Three Variables: Ballmer says improving Microsoft's performance has "three big dimensions: focusing the whole company on a single strategy, improving our capability in all disciplines and engineering/technology areas, and working together with more collaboration and agility around our common goals."

3. End of Silos: It's clear Ballmer does NOT want Microsoft employees to think or work in a vacuum. Instead, he wants employees focused on the greater common good and synergies. The goals is One Strategy, One Microsoft.

He wrote: "We are rallying behind a single strategy as one company — not a collection of divisional strategies. Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders. All parts of the company will share and contribute to the success of core offerings…"

4. Bing Is Part of Bigger Picture: About one-third into the memo, Ballmer started rattling off the big-name products and services that demand big-time focus. Anybody who thinks Microsoft will punt on money-losers like Bing are dead wrong. He wrote: "Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers."

5. The New Organization: Microsoft will now be organized by function. The leaders and focus areas include:

  • Operating Systems Engineering Group. Terry Myerson will lead this group, and it will span all OS work for console, to mobile device, to PC, to back-end systems
  • Devices and Studios Engineering Group: Julie Larson-Green will lead this group and will have all hardware development and supply chain from the smallest to the largest devices Microsoft builds. All games, music, video and other entertainment are covered here as well.
  • Applications and Services Engineering Group. Qi Lu will lead this group which includes productivity, communication, search and other information categories.
  • Cloud and Enterprise Engineering Group. Satya Nadella will lead development of back-end technologies like datacenter, database and specific technologies for enterprise IT scenarios and development tools. He will lead datacenter development, construction and operation.
  • Dynamics. Kirill Tatarinov will continue to run Dynamics as is, but his product leaders will dotted line report to Qi Lu, his marketing leader will dotted line report to Tami Reller and his sales leader will dotted line report to the COO group.
  • Advanced Strategy and Research Group. Eric Rudder will lead Research, Trustworthy Computing, teams focused on the intersection of technology and policy, and will drive cross-company looks at key new technology trends.
  • Marketing Group. Tami Reller will lead all marketing with the field relationship as is today.
  • COO. Kevin Turner will continue leading our worldwide sales, field marketing, services, support, and stores as well as IT, licensing and commercial operations.
  • Business Development and Evangelism Group. Tony Bates will focus on key partnerships especially our innovation partners (OEMs, silicon vendors, key developers, Yahoo, Nokia, etc.) and work on evangelism and developer outreach.
  • Finance Group. Amy Hood will centralize all product group finance organizations.
  • Legal and Corporate Affairs Group. Brad Smith will continue as General Counsel with responsibility for the company's legal and corporate affairs and will map his team to the new organization.
  • HR Group. Lisa Brummel will lead Human Resources and map her team to the new organization.

6. Engineering — Four Plus One: Ballmer said there will be four engineering areas: OS, Apps, Cloud, and Devices. The key takeaways: Devices are getting equal footing with Microsoft's software work. Plus, he added: "We will keep Dynamics separate as it continues to need special focus and represents significant opportunity."

7. The Reorg Isn't Done: Ballmer conceded that the changes will take several months to fully implement. He wrote: "We have resolved many details of this org, but we still will have more work to do. Undoubtedly, as we involve more people there will be new issues and changes to our current thinking as well. Completing this process will take through the end of the calendar year as we figure things out and as we keep existing teams focused on current deliverables like Windows 8.1, Xbox One, Windows Phone, etc."

8. Executive Exits, New Responsibilities: 

  • Kurt DelBene will be retiring from Microsoft. "Kurt has been a huge part of our success in evolving Office to be a great cloud service," Ballmer wrote.
  • Craig Mundie will devote 100% of his time to a special project for Ballmer through the end of this calendar year. Beginning in 2014, Craig will continue as a consultant through his previously agreed upon departure date at the end of calendar 2014.
  • Rick Rashid will step away from running Microsoft Research and move into a new role driving core OS innovation in Microsoft's operating systems group. 9.

9. Missing: The VAR Guy forgot to add #9. 

10. Keys to Success: Ballmer says Microsoft needs to be nimble, communicative, collaborative, decisive, motivated.

Bonus — 11. Catch Phrase?: Ballmer said Microsoft is evolving again, "Because we're not done. Let's go."

Will employees, partners and customers follow? The VAR Guy is watching…

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Sales & Marketing

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8 comments

  1. Avatar Anymouse July 13, 2013 @ 6:26 pm
    Reply

    When a Company does things
    When a Company does things like this, it usually means the future outlook for said Company is grim.

    This is Microsoft, Ballmers Microsoft, so we can expect wrong choices. I really don’t think customers will put up with having to pay subs on an OS just to use their computer; when more practical choices like Linux exist.

    It’s OK to disagree with me when I say this is destine for failure and will probably end up shrinking Microsoft into a much, much smaller company. But what did everyone expect, a company like Microsoft can’t live off of Windows forever.

    On another note, since they admit helping the NSA in any way possible, it would be insane for other companies to continue to use any Microsoft product. Windows just isn’t a practical choice anymore for anyone who cares about privacy and freedom. Never mind video games, games aren’t worth loosing rights. If you care more about games than your rights, perhaps you should plan a permanent move to Iran or Cuba.

    This year alone we have seen the rise of Linux on the Desktop, Mobile and Console markets. If you don’t think times are changing and the Microsoft way is going the way of the dodo, you’re living in a fantasy world.

    Not to mention the staleness of AAA games. Indie games are quickly becoming the go-to for originality. Indies even support the cross-platform ideas. Indie companies are the next AAA and Microsoft has already lost that exclusivity.

    I’m sorry, the future just isn’t bright for Microsoft.

    • Joe Panettieri Joe Panettieri July 15, 2013 @ 2:42 pm
      Reply

      Anymouse (Anonymous?): I’m a
      Anymouse (Anonymous?): I’m a bit more “mixed” on my view of Microsoft. On the upside, seems like the server, business application (Exchange, SharePoint, Lync) and cloud efforts are going well. Desktop/mobile? Not so great.
      -jp

  2. Avatar Anonymous July 14, 2013 @ 10:47 pm
    Reply

    So, uuuh, number 9 is that
    So, uuuh, number 9 is that secretive?

    • Joe Panettieri Joe Panettieri July 15, 2013 @ 2:43 pm
      Reply

      As the Beatles would say:
      As the Beatles would say: Number 9, Number 9, Number 9…

  3. Avatar wanderson July 15, 2013 @ 3:42 am
    Reply

    Every time the technology
    Every time the technology media, industry and populace hangs on every word of Steve Ballmer or Bill Gates as some sort of divine wisdom or truth I cringe, especially when a short time later these prognostications fall flat and Microsoft supporters remind the rest of us that success will come next time around.
    If and when Ballmer’s proclamations ever come true, I will salute the company for not being a total klutz.

    • Joe Panettieri Joe Panettieri July 15, 2013 @ 2:45 pm
      Reply

      When Ballmer talks the media
      When Ballmer talks the media has to listen. The big disconnect in this case is Ballmer spending Monday-Wednesday at Worldwide Partner Conference and then not mentioning the channel at all in his 2,700 word missive on Thursday…
      -jp

  4. Avatar Anonymous July 23, 2013 @ 6:40 am
    Reply

    I just hope those that caused
    I just hope those that caused the travesty of backward IT evolution for 25 years are also brought to justice on their way out the door.

    It’s been a long time coming but damn!, it’s good to see innovation, hope and a brighter future surging forth at the hands of companies with at least some ethics.

    Microsoft will only be remembered for the damage they caused.

    Luckily the following years will yield a return to functional computing, maybe even fun computing, where technology helps rather than hinders. Where hour upon hour of lost productivity and excruciating frustration are a thing of the past and people come to value their computers as useful tools, not the “necessary evil” MS had them believe in.

    Thanks God it’s over.

    • Joe Panettieri Joe Panettieri August 2, 2013 @ 9:28 pm
      Reply

      Anonymous: Agreed —
      Anonymous: Agreed — Microsoft caused some problems. But doesn’t the company also deserve credit for freeing corporate IT from expensive Unix systems? Also, anybody else remember how BAD Mac OS was in the mid- and late 1990s? And what about NetWare lacking basic TCP/IP capabilities until late in the game?

      Microsoft did some things wrong, but also got an awful lot right.
      -jp

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