What Microsoft’s Reorg Means For IT Pros

Microsoft has undergone a major structural reorganisation, shifting several internal executives around and realigning some of its product groups. For IT pros actually implementing those products, however, it’s still a case of “business as usual” and “you could see this coming a mile off”.

Picture: Justin Sullivan/Getty Images

The reorganisation, which has been rumoured for weeks, was announced in a Microsoft-wide email sent by CEO Steve Ballmer. “We are rallying behind a single strategy as one company — not a collection of divisional strategies,” Ballmer wrote.

Not everything in the statement is so clear-cut. As this article points out, Ballmer is not going to win any prizes for clear and simple writing with this epic 2700-word document. Stripped of jargon, the main development from a product perspective is the reorganisation of the company into five main divisions, all of which sit under “engineering” in the corporate structure:

  • Operating systems: this includes Windows, Windows Phone and those parts of Windows Server which are defined as “back-end systems” and “core cloud services”.
  • Devices and studios: this includes all hardware projects (most notably Xbox and Surface) and the games, music and other services designed to run with them.
  • Applications and services: this includes all the Office tools, plus search and other online offerings.
  • Cloud and enterprise This covers data centre (both on-premises and Azure), database and enterprise-specific tools.
  • Dynamics: Still running as a separate division rather than as part of Applications and services, a point we’ll return to later.

At Lifehacker, our primary concern is always how technology can be used effectively, not the behind-the-scenes corporate machinery that delivers that technology. What makes this reorganisation at Microsoft interesting is that it reflects trends that have already been evident in its product line for some time. The product names themselves won’t be changing in the near future, and the way they intersect has been evident for some time to come.

It’s no shock to see Windows Phone and Windows in one division, given that they have a common interface and an increasingly unified development base. Placing all hardware efforts (from Xbox to Surface) in a single division also makes sense, given the increased reliance of all those platforms on Microsoft’s software and cloud services. And given the reliance of Azure on core server technologies such as Active Directory, it makes sense to have all of those in one place.

Indeed, this trend has been evident in a broad sense for decades. Microsoft’s original push into the server market with Windows NT back into the 1990s was driven by a very basic insight: people who were already familiar with the Windows GUI might welcome an environment where they could use the same tools to manage larger networks. That principle has evolved considerably since that time (and arguably in the server arena, the best approach these days is to use Server Core and eschew the GUI entirely as much as possible). However, the fundamental idea — if you use one Microsoft product, you may be inclined to use another — remains.

That doesn’t mean the process will be seamless any time soon. One interesting indication of that: the fact that Dynamics (which produces Microsoft’s operational business software products) continues to operate as a separate division, despite being a smaller segment than (say) Office. That reminds us that it’s not always possible to easily transit existing customer groups into new ways of thinking — something that every enterprise software producer is reminded of when they stage an acquisition.

There’s also evidently some tension in terms of where Microsoft’s cloud and server tools are managed. While the enterprise-facing tools are in the cloud and enterprise group, some of the core “back-end technologies” remain in the OS group. For that model to succeed, Microsoft will have to keep pushing the “single strategy” message. But that’s a message that makes sense; Microsoft isn’t putting itself out on a limb by making delivery of services via the cloud a key focus.

That’s our first take. Have your own thoughts on what the Microsoft reorganisation means? We’re all ears (as ever) in the comments.