Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer had been rumored to be working on a restructuring of the mammoth Microsoft operation, though there was talk that any such announcement would come at the start of this month; learn the details here. But as last week came and went, the speculation died down. While no one expected a full-blown press conference if such an announcement was being made, there was expected to be some kind of press release or statement from Ballmer regarding the changes.
The day finally arrives
Thursday, July 11th, Microsoft Corporation (NASDAQ:MSFT)-watchers got their wish in a post directly from Ballmer on the company’s website, which gave the substance of a company letter to employees announcing the restructuring. In short, Ballmer calls it “One Microsoft,” which streamlines eight divisions into four engineering groups, eliminating “islands” as Ballmer calls them, where Office developers and Windows developers were in their own divisions and own siloes and really did not collaborate very much.
As one tech writer put it, “When I covered the company day to day, the best way to get dirt on Office was to ask the Windows guys and vice versa. Clearly, after decades of that, and faced with huge and capable (and well funded) competition – Google, Apple, Amazon et al., Microsoft Corporation (NASDAQ:MSFT) can’t afford to let that behavior stand,” said Barbara Darrow, who writes for GigaOM.
The new Microsoft
The new Microsoft Corporation (NASDAQ:MSFT), according to Ballmer, will have on unified strategy across the company and “(w)e will see our product line holistically, not as a set of islands.” The divisions will now be split up and organized under four groups: Operating System, Apps, Cloud and Devices. Each of the old divisions’ marketing and legal teams will also consolidate under a single function, rather than having each group with its own staffing.
“We are rallying behind a single strategy as one company – not a collection of divisional strategies,” Ballmer wrote. “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.”
There have been many reactions to Microsoft Corporation (NASDAQ:MSFT)’s decision, from thoughts that it “signals urgency” to realizations that it simply “compounds an existing problem.” According to the Fool’s Alex Dumortier, this issue lies in Microsoft Corporation (NASDAQ:MSFT)’s inability to place power in someone else’s hands aside from Ballmer. With plenty of uncertainty surrounding Ballmer himself, it may be tough for some investors to swallow the fact that the company appears to be going “all-in” on the exec, so to speak.