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Rumored Reorg of Microsoft In the Works

CEO Steve Ballmer is rumored to be working on an executive restructuring that might have some of the division heads in Microsoft changing job titles.

AllThingsD's Kara Swisher, who broke the story of the pending executive shakeup in early June, wrote an update Sunday night suggesting that the "level of worry" is growing among Microsoft executives.

"Ballmer has been making these significant plans with limited consultation with the wider leadership group at the software giant. Instead, he has been working with only a small group of his direct reports and also some Microsoft board members, numerous sources said," Swisher wrote.

Swisher quoted one anonymous source "close to the situation" as saying the reorg has the feel of a "legacy" project for Ballmer: "It's the first time in a long time that it feels like that there will be some major shifts, including some departures."

According to Swisher, Ballmer is likely to unveil the reorg plans to top executives on July 1. In the past, Microsoft has often revealed executive changes in the last few weeks of June as the end of the company's fiscal year approached.

Ballmer reportedly is reorganizing the company around the "devices and services" meme that he broached in a shareholder letter in October. The nuance of that letter's text left Microsoft's position as a software company that produces a few hardware devices unchanged, but emphasized that the software is mostly aimed now at powering devices and increasingly enabling cloud services.

Along those lines, Swisher's reporting has emphasized that the suspected winners in the reorganization will be Satya Nadella, president of the Microsoft Servers and Tools division; Tony Bates, president of Skype; and Don Mattrick, president of the Interactive Entertainment Division.

A big open question since the departure of Windows President Steven Sinofsky in November is where the core Windows business would fall within a devices-and-services structure. Ballmer did little to clarify Windows' direction when he let Sinofsky's departure pass without handing the bureaucratic authority of a presidential title to another executive. Instead he split the job between Tami Reller and Julie Larson-Green.

In an interview with RCP this month, Jon Roskill, corporate vice president of the Microsoft Worldwide Partner Group, declined to comment on the reorganization rumors. Roskill has been Microsoft's channel chief for three years -- a short tenure compared to his immediate predecessor Allison Watson's eight-year term, but a respectable amount of time compared to Watson's predecessors.

Meanwhile, the speaker lineup for the Microsoft Worldwide Partner Conference keynotes July 8-10 sheds some possible light on the situation, but could obviously be changed in the wake of a reorg. Current keynoters include Ballmer, Roskill, Nadella, Reller, COO Kevin Turner and Worldwide Public Sector Corporate Vice President Laura Ipsen.

About the Author

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

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