Microsoft Unveils Major Realignment

Microsoft shuffled the deck of top executives on Tuesday, consolidating its seven divisions into three and naming four presidents to report to CEO Steve Ballmer. One of the new presidents, former senior vice president Jim Allchin, will retire at the end of 2006 when Windows Vista ships.

The three new divisions are Microsoft Platform Products and Services Division; the Microsoft Business Division; and Microsoft Entertainment & Devices Division.

Allchin and Kevin Johnson are co-presidents of the Platform Products and Services Division, which includes the current Client division (consisting primarily of the Windows client); the Server & Tools division, formerly run by Eric Rudder; and MSN. Johnson is supposed to take over the division when Allchin retires.

Rudder will assume a new role working directly for Bill Gates, chairman and chief software architect. He will focus on some of the company's key advanced development efforts and overall technical strategy. He will transition into the new role following the launch of Visual Studio and SQL Server 2005 after this year. David Cole, senior vice president, will continue to lead MSN and report to Johnson.

Based on revenues for Microsoft's fiscal 2005, which ended in June, the Platform Products and Services is by far the largest of the new divisions by revenues. It combines the $12 billion Client Division with the $9.9 billion Server & Tools Division and the $2.2 billion MSN Division for a total of about $24.3 billion in revenues. That works out to more than 60 percent of Microsoft's total 2005 revenues of $39.8 billion.

Jeff Raikes, who currently runs the Information Worker Business that includes Microsoft Office, will add the Microsoft Business Solutions division to his responsibilities. Raikes becomes president of the new Microsoft Business Division. Doug Burgum, the senior vice president who ran Microsoft Business Solutions, now reports to Raikes. In 2005, Information Worker brought in $11 billion in revenues, while MBS brought in $803 million.

Under the reorganization, Robbie Bach becomes president of the Microsoft Entertainment & Devices Division. The new division combines the $337 million Mobile and Embedded Division and the $3.2 billion Home and Entertainment Division.

Ray Ozzie, who was brought on as a chief technical officer reporting to Gates when Microsoft bought Groove Networks, will expand his role. Ozzie will now assume responsibility for helping drive the software-based services strategy and execution across all three divisions.

"These changes are designed to align our business groups in a way that will enhance decision-making and speed of execution," Ballmer said in a statement.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.


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