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Is Microsoft Corporation (MSFT) Following Intel Corporation (INTC)’s Lead?

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It’s no secret that Microsoft Corporation (NASDAQ:MSFT), like Intel Corporation (NASDAQ:INTC), is in the midst of a transition — a much-needed one. The PC market in which both industry leaders made their marks is nothing close to what it was, nor is that likely to change. The IT world of the future is all about mobile and cloud computing, and both Microsoft and Intel are making inroads in these explosive areas. And investors are beginning to take notice, too: Microsoft’s share price is up 30% for the year, and Intel ‘s nearly 20%.

Microsoft Corporation (MSFT)

Intel Corporation (NASDAQ:INTC)’s new CEO, Brian Krzanich, jumped into his new role with both feet. In addition to buying a mobile-related joint venture from STMicroelectronics and Ericsson, Krzanich is leading a much-needed management restructuring allowing Intel to make, “quick, informed decisions.” If the rumors are true, Microsoft Corporation (NASDAQ:MSFT)’s CEO Steve Ballmer is going to take a page from Krzanich’s book, which should have Microsoft fans cheering.

The rumors
Ballmer’s letter to shareholders last year included the usual CEO-speak, as expected. But there was also interesting verbiage littered throughout the note; words like “fundamental shift in our business,” “new experiences,” and “move to the cloud,” to name a few. As it turns out, the Oct. 9 missive may have been Ballmer’s way of laying the foundation for what’s coming, as Microsoft Corporation (NASDAQ:MSFT), like Intel Corporation (NASDAQ:INTC), transforms its business to keep pace with the market.

Microsoft currently has eight business units run by six presidents, not overly bloated for a company of its size; but in the fast-moving worlds of mobile and cloud computing, leaner is most certainly meaner. And Krzanich understands the need for speed in today’s IT market, which is why his corporate restructuring effectively removed an entire level of management.

Now, according to those infamous, “people familiar with the matter,” Ballmer is considering a restructuring of his own — streamlining the number of business units and the folks running them, ala Intel Corporation (NASDAQ:INTC). As per the anonymous sources, Ballmer and the Microsoft Corporation (NASDAQ:MSFT) board are discussing cutting its number of business units in half, and shaking up the executive management structure to better align leadership with the world Microsoft now lives in.

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