updated 10:20 am EDT, Thu July 24, 2008
MS Reorg and Windows
Microsoft on Thursday said it was undertaking a major restructuring of the company that will help it return focus to its core Windows software. The company's broader Platforms & Services division will now be split into a dedicated Windows & Windows Live division and a separate Online Services division, both of which will report directly to company chief Steve Ballmer. The effort is publicly described as making Microsoft more nimble and should help the company move more quickly fight off rivals in the "very competitive arenas" of operating systems and the web, according to Ballmer.
Additionally, the former head of the division, Kevin Johnson, is voluntarily leaving the company to become CEO at Juniper Networks. The reasons behind the departure are unclear, although Johnson was one of the chief architects of the since-failed takeover of Yahoo meant to fast-track a climb in market share for both the search and web advertising businesses at Microsoft.
Privately, however, the company is returning much of its attention to Windows, according to a leaked company-wide memo obtained by Kara Swisher of All Things Digital. Ballmer tells staff that Windows is again the company's "number one job" and reiterates the company's plans to repair Vista's damaged image through an advertising campaign taking place over the course of the next few weeks.
The executive also singles out Apple as a primary focus of the Windows team, noting that it has to work more closely with hardware makers. Both the desktop operating system as well as Windows Mobile provide a choice of hardware but aren't as tightly integrated as Mac OS X or iPhone and suffer for this, Ballmer says in a rare direct comparison of the two companies' overall strategies.
"In the competition between PCs and Macs, we outsell Apple 30-to-1," he says. "But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones--providing choice as we work to create great end-to-end experiences."
Microsoft also plans to improve PCs' experiences with cloud computing, or the integration of PCs with Internet platforms, as well as to wage a "long-term battle" in search versus Google.
Ballmer further argues that the company's future isn't dependent on making a deal for some or all of Yahoo. The buyout attempt "was a tactic, not a strategy," he claims.