Microsoft CEO Steve Ballmer today announced a reorganization of the company around four areas: operating systems; devices and studios; applications and services; and cloud and enterprise.
Credit: REUTERS/Robert Galbraith
Microsoft CEO Steve Ballmer today announced a reorganization
of the company around four areas: operating systems; devices and studios;
applications and services; and cloud and enterprise.
He says in a memo to all Microsoft Employees that the
reshuffling will give priority to corporate custom
[MICROSOFT: Purges, personalities & pursuing other opportunities]
The sweeping changes will be phased in over the rest of
2013, keeping existing teams that are in charge of Windows 8.1, Xbox One,
Windows Phone and other top-priority products firing on all cylinders until a
smooth transition can be made, he says.
After the reorganization teams that span groups will be in
charge of key technologies and services with each team headed by a champion who
reports directly to Ballmer or to someone else who reports directly to Ballmer.
“We will also have outgrowths on those major initiatives
that may involve only a single product group,” he says. “Certainly, succeeding
with mobile devices, Windows, Office 365 and Azure will be foundational. Xbox
and Bing will also be key future contributors to financial success.”
Here’s the full note Ballmer sent to employees to describe
From: Steve BallmerTo: Microsoft - All EmployeesDate: July 11, 2013, 6 a.m.Subject: One MicrosoftToday, we are announcing a far-reaching realignment of the
company that will enable us to innovate with greater speed, efficiency and
capability in a fast changing world.
Today’s announcement will enable us to execute even better
on our strategy to deliver a family of devices and services that best empower
people for the activities they value most and the enterprise extensions and
services that are most valuable to business.
This company has always had a big vision — to help people realize
their full potential. In the earliest days, it was by putting a PC on every
desk and in every home. We’ve come farther than we could have imagined. The
impact we have collectively made on the world is undeniable, and I am inspired
when talented new hires say they chose Microsoft because they want to change
the world — that’s what we do today, and that’s what we’ll do tomorrow.
Sharpening Our Strategy
About a year ago, we embarked on a new strategy to realize
our vision, opening the devices and services chapter for Microsoft. We made
important strides — launching Windows 8 and Surface, moving to continuous
product cycles, bringing a consistent user interface to PCs, tablets, phones
and Xbox — but we have much more to do.
Going forward, our
strategy will focus on creating a family of devices and services for
individuals and businesses that empower people around the globe at home, at
work and on the go, for the activities they value most.
We will do this by leveraging our strengths. We have powered
devices for many years through Windows PCs and Xbox. We have delivered
high-value experiences through Office and other apps. And, we have enabled
enterprise value through products like Windows Server and Exchange. The form of
delivery shifts to a broader set of devices and services versus packaged
software. The frontier of high-value scenarios we enable will march outward,
but we have strengths and proven capabilities on which we will draw.
This memo shows you how far we have developed our
thinking on our strategy for high- value activities based on devices and
Driving Our Success
It is also clear to me and our leadership that we must do an
extraordinary job to succeed in this modern world. We have delivered many great
products and had much success in market, but we all want more. That means
better execution from product conceptualization and innovation right through to
marketing and sales. It also means operational excellence in cloud services,
datacenter operations, and manufacturing and supply chain that are essential in
a devices and services world. To advance our strategy and execute more quickly,
more efficiently, and with greater excellence we need to transform how we
organize, how we plan and how we work.
Improving our 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.
This is a big undertaking. It touches nearly every piece of
what we do and how we work. It changes our org structure, the way we
collaborate, how we allocate resources, how we best empower our engineers and
how we market.
One Strategy, One Microsoft
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, like 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.
We will reshape how we interact with our customers,
developers and key innovation partners, delivering a more coherent message and
family of product offerings. The evangelism and business development team will
drive partners across our integrated strategy and its execution. Our marketing,
advertising and all our customer interaction will be designed to reflect one
company with integrated approaches to our consumer and business marketplaces.
How we organize our engineering efforts will also change to
reflect this strategy. We will pull together disparate engineering efforts
today into a coherent set of our high-value activities. This will enable us to
deliver the most capability — and be most efficient in development and operations
— with the greatest coherence to all our key customers. We will plan across the
company, so we can better deliver compelling integrated devices and services
for the high-value experiences and core technologies around which we organize.
This new planning approach will look at both the short-term deliverables and
long-term initiatives needed to meet the shipment cadences of both Microsoft
and third-party devices and our services.
This means we will organize the company by function:
Engineering (including supply chain and datacenters), Marketing, Business
Development and Evangelism, Advanced Strategy and Research, Finance, HR, Legal,
and COO (including field, support, commercial operations and IT). Each
discipline will help drive our overall strategy. Each discipline will also be
charged with improving our core capabilities in its area. We must improve in
all aspects of the business.
There will be four engineering areas: OS, Apps, Cloud, and
Devices. We will keep Dynamics separate as it continues to need special focus
and represents significant opportunity. We will consolidate our technologies
coherently into these groups pulling together some things that have been spread
out in our current BG structure like cloud infrastructure, operating systems,
mail, and identity, to name a few. Some of these changes will involve putting
things together and others will involve repartitioning the work, but in all
instances we will be more coherent for our users and developers. 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.
To improve engineering pace and quality, we will increase
focus on our engineering systems, processes, and tools to improve the
productivity of every engineer and to facilitate engineering collaboration and
contribution across the company. Our engineering culture and new structure will
enable more cross- group contribution, while maintaining confidentiality of
some projects as needed. We will improve the approach we use to get MSR
involved in product development, building on and enhancing our significant
Organizing for Speed and Strategic Alignment
Specifically, our teams and their leaders will be these:
OperatingSystems Engineering Group. Terry Myerson will lead this group, and it
will span all our OS work for console, to mobile device, to PC, to
back-end systems. The core cloud services for the operating system will bein this group.
Devicesand 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 we build. Julie will also take
responsibility for our studios experiences including all games, music,video and other entertainment.
Applicationsand Services Engineering Group. Qi Lu will lead broad
applications and services core technologies in productivity,communication, search and other information categories.
Cloudand Enterprise Engineering Group. Satya Nadella will lead
development of our back-end technologies like datacenter, database and our
specific technologies for enterprise IT scenarios and development tools.He will lead datacenter development, construction and operation.
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 theCOO group.
AdvancedStrategy and Research Group. Eric Rudder will lead Research, Trustworthy
Computing, teams focused on the intersection of technology and policy, andwill drive our cross-company looks at key new technology trends.
MarketingGroup. Tami Reller will lead all marketing with the field
relationship as is today. Mark Penn will take a broad view of marketing
strategy and will lead with Tami the newly centralized advertising andmedia functions.
Turner will continue leading our worldwide sales, field marketing,
services, support, and stores as well as IT, licensing and commercialoperations.
BusinessDevelopment and Evangelism Group. Tony Bates will focus on key
partnerships especially our innovation partners (OEMs, silicon vendors,
key developers, Yahoo, Nokia, etc.) and our broad work on evangelism and
developer outreach. DPE, Corporate Strategy and the business development
efforts formerly in the BGs will become part of this new group. OEM will
remain in SMSG with Kevin Turner with a dotted line to Tony who will workclosely with Nick Parker on key OEM relationships.
FinanceGroup. Amy Hood will centralize all product group finance
organizations. SMSG finance, which is geographically diffuse, willreport to Kevin Turner with a dotted line to Amy.
Legaland Group Corporate Affairs Group. Brad Smith will continue as General
Counsel with responsibility for the company's legal and corporate affairsand will map his team to the new organization.
HRGroup. Lisa Brummel will lead Human Resources and map her team to the new organization.
As part of these changes, 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, and is a key member of my leadership team. I can’t express
enough gratitude for the work he’s done for the company, and I will truly miss
him. Kurt is a truly amazing leader and a special person. His contributions to
Microsoft over 20+ years can inspire us all.
Craig Mundie will be stepping off the SLT to devote 100% of
his time to a special project for me 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.
Also at this time, Rick Rashid will step away from running
Microsoft Research and move into a new role driving core OS innovation in our
operating systems group. Rick created MSR, the most amazing computer science
research institution in the world. We owe him so much for that. He has a great
team to assume the mantle, and it is exciting to have Rick return to his roots
in OS to help propel us forward.
How We Work
The final piece of the puzzle is how we work together and
what characteristics this new Microsoft must embody. There is a process element
and a culture element to discuss.
Process wise, each major initiative of the company (product
or high-value scenario) will have a team that spans groups to ensure we succeed
against our goals. Our strategy will drive what initiatives we agree and commit
to at my staff meetings. Most disciplines and product groups will have a core
that delivers key technology or services and then a piece that lines up with
the initiatives. Each major initiative will have a champion who will be a
direct report to me or one of my direct reports. The champion will organize to
drive a cross-company team for success, but my whole staff will have commitment
to the initiative’s success. We will also have outgrowths on those major
initiatives that may involve only a single product group. Certainly, succeeding
with mobile devices, Windows, Office 365 and Azure will be foundational. Xbox
and Bing will also be key future contributors to financial success. Our focus
on high-value activities — serious fun, meetings, tasks, research, information
assurance and IT/Dev workloads — also will get top-level championship.
Culturally, our core values don’t change, but how we express
them and act day to day must evolve so we work together to win. The keys are
In a world of continuous services, the timeframe for product
releases, customer interaction and competitive response is dramatically
shorter. As a company, we need to make the right decisions, and make them more
quickly, balancing all the customer and business imperatives. Each employee
must be able to solve problems more quickly and with more real-time data than
in the past.
In the new, rapid-turn world, we need to communicate in ways
that don’t just exchange information but drive agility, action, ownership and
Collaborative doesn’t just mean “easy to get along with.”
Collaboration means the ability to coordinate effectively, within and among
teams, to get results, build better products faster, and drive customer and
As a global company with literally billions of diverse
customers in an accelerating business environment, we must have a clear
strategic direction but also empower employees closest to the customer to make
decisions in service of the larger mission. This is tricky in a big company,
but it is the key to higher levels of productivity, growth and customer
In our industry, every day brings more challenges and more
opportunities than the day before. But we have a unique chance to make the
lives of billions of people better in fundamental ways. This should inspire all
of us — those who love making products and services, those who love engaging
with customers, and those who love planning and running our company in the most
effective way possible. We want people who get up each morning excited to make
Microsoft better — that’s how we come closer to fulfilling the potential of all
people around the globe.
Our leadership team has discussed these cultural aspects a
lot and is committed. In my own staff meetings, we are modeling these new characteristics
yet also find ourselves occasionally slipping back. One strategy, united
together, with great communication, decisiveness and positive energy is the
only way to fly.
Seizing Our Unique Opportunity
Together, we have created great products and great success, A
but we all want more. That means a strategy to deliver a family of devices and
services that best enable people for the activities they value most and the
enterprise extensions and services that are most valuable to business.
new structure to bring these to market faster. Stronger centralized services so
we can be more efficient and effective. Priority focus areas, short and long
term. New characteristics of how we work together. In other words, better
execution and innovation through strategy and goal and discipline and
engineering coherence. One Microsoft all the time.
Across Microsoft, we are facing incredible new
opportunities. As devices become further integrated into everyday life, we will
have to create new and extraordinary experiences for our customers on these
devices. We are going to focus on completely reinventing experiences like
creating or viewing a creative document and what it means to communicate
socially at home or in meetings at work. We are going to immerse people in deep
entertainment experiences that let them enterprise information assurance. We
will make these high-value activities priorities in our strategy have serious
fun in ways so intense and delightful that they will blur the line between
reality and fantasy. And as we develop these new experiences, we will also
support our developers with the simplest ways to develop apps or cloud services
and integrate with our products. We will help businesses that find themselves
in a new world of ever-mounting information to manage that information through
Lots of change. But in all of this, many key things remains
the same. Our incredible people, our spirit, our commitment, our belief in the
transformative power of technology — our Microsoft technology — to make the
world a better place for billions of people and millions of businesses around
the world. It’s why I come to work inspired every day. It’s why we’ve evolved
before, and why we’re evolving now. Because we’re not done.