Microsoft officially announces reorganization: 'One Microsoft'

It's been rumored for over a month and today Microsoft pulled the trigger on its plans for a huge reorganization on its corporate structure. The news, which comes just before Microsoft's stock starts trading this morning, is a big change for the company who is working to define its new future.

In an internal memo to employees that was posted on Microsoft's news page, CEO Steve Ballmer stated:

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.

Here are the big changes:

  • Terry Myerson will head up the OS division, which will include Windows development as well as Xbox software.
  • Julie Larson-Green is now the head of all of Microsoft's hardware products, including Surface and Xbox, along with the music, video and games division.
  • Qi Lu will be in charge of online services.
  • Satya Nadella is in charge of cloud services.
  • Kurt DelBene, who was the head of the Office division, is retiring from Microsoft.
  • Skype president Tony Bates will now lead the company's Business Development and Evangelism division.
  • Rick Rashid will leave as head of Microsoft Research and will now work to help develop "core OS innovation in our operating systems group"

Other changes include Tami Reller leading all marketing at Microsoft and Eric Rudder who will now lead the Research team. Craig Mundie's role will change from a senior adviser to working on an unnamed "special project" for Ballmer through the end of 2013. Mundie will then become an consultant for Microsoft before he officially retires at the end of 2014.

Other Microsoft team members will stay in their job posts, including COO Kevin Turner who will lead worldwide sales at Microsoft, and Amy Hood who will remain as chief financial officer.

Source: Microsoft | Image via Microsoft

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It will be interesting to see what Microsoft will be doing for the laptop and desktop users--both business and personal. With a marketplace that is already pretty well saturated, a major improvement will be needed to convince people to ditch their existing hardware. After all, after a business has bought a desktop or laptop for those employees who need one and when many individuals/families already have multiple laptops/desktops in addition to smart phones, what is there to add to the mix that is a significant addition and not a replacement or substitution?

Very interesting moves. I don't know enough about these people to guess how it will turn out, but I like how the divisions were created. I can't wait to see how WP improves thanks to being folded into the OS group.

As far as the choice for overseeing Xbox and gaming, I really don't care if that person is a 'gamer'. I think some gamers get too defensive about this stuff. As others have pointed out, there will be someone that directly runs the Xbox and gaming group and that person will report to JLG, they just haven't hired that person yet.

The reason I don't care about JLG not being a 'gamer' is that many other companies that make games or consoles are not run by gamers and yet it doesn't seem to keep them from putting out quality stuff. Sony's gaming division is not run by a 'gamer' and they are getting all the praise right now, so I think the whole 'gamer' argument is overblown.

As far as the Xbox focus on more than gaming, it doesn't both me as long as I get quality gaming content. E3 proved to me that MS is serious about catering to core gamers every bit as much as the entertainment side. E3 also proved that Sony is also pursuing entertainment features beyond gaming, do its a wash. MS said they are spending something like a billion dollars over the first year in exclusive titles. Their lineup was easily the equal of Sony's launch lineup (you can argue what you personally prefer, but they had similar lineups generally).

Project Spark, the Sunset game, and Quantum Break were nice to see in a gaming world filled with Zombies and shooters. I know its fun to bash MS for some reason, but I just don't see the evidence for doing so in this case. MS is trying to prove that they can give gamers what they want while expanding into other areas. It won't be easy, but I think they have gotten off to a good start.

I wonder what that special project is. Also, I don't know what to think about Julie Larson-Green taking over hardware. That's definitely interesting.
Lastly, that's one long email. Maybe Ballmer asked Sinofsky for some tips & tricks?

Sszecret said,
I wonder what that special project is. Also, I don't know what to think about Julie Larson-Green taking over hardware. That's definitely interesting.
Lastly, that's one long email. Maybe Ballmer asked Sinofsky for some tips & tricks?

I honestly don't see what the problem is with JLG taking over the hardware division, people want to make about Xbox and how it should have a gamer in charge of it. People seem to fail to realize that Xbox has it's own head and that they will report to JLG who will then report directly to Ballmer. Less middle men and VPs stuffing things up is good.

Also she's been known to be able to get different groups to work together, and coming from Office and Windows before this she should be able to get the hardware to work better with the rest. On that note, the Xbox software side is in the OS group, so that's under someone else.

Jolo said,
Then, who is in charge at Office Software? Online or Cloud?
Applications and Services Engineering Group. Qi Lu will lead broad applications and services core technologies in productivity (Office), communication (Skype+Lync), search (Bing) and other information categories.

Jolo said,
Then, who is in charge at Office Software? Online or Cloud?

I was confused by that too. Where would the Office team sit in this?

Jolo said,
Then, who is in charge at Office Software? Online or Cloud?

Office will be in the Applications and Services Engineering Group, notice how Office is now also a service with Office 365.

Jolo said,
Then, who is in charge at Office Software? Online or Cloud?

Qi Lu will be in charge of online services.
• Satya Nadella is in charge of cloud services.
I'm guessing cloud will be skydrive and webapps
And Qi Lu will be office services because it is moving to subscriptions

One Windows running across multiple platform sounds very cool! No longer developers have to create apps multiple times but the opportunity will be huge. Soon the competition will follow Microsoft's footsteps with One Unified OS.

xankazo said,
What about Windows Phone?

"Terry Myerson will head up the OS division, which will include Windows development as well as Xbox software."

"A new operating systems engineering group that will span across console, mobile device, and PC."

Looking forward to what the OS division will do now. Very much looking forward to more unity between my devices. #Metro

It's quite clearly not a games console any more They've made the decision to use the name for their next "Lifestyle device" which also plays games

the better twin said,
So no gamer for the Xbox division? Hilarious.

Why do they need one? The XBox is more than just a gaming console.

the better twin said,

Perhaps that's the problem.
How exactly is that a problem? What's wrong with what we have traditionally referred to as consoles evolving into something better and more encompassing?

the better twin said,

Perhaps that's the problem.

Not really a problem when you see that the consoles you have could play a bigger role in consumer tech. I personally think it's great that the XBox is expanding to play a larger role in my living room.

Bad Man Duke said,
How exactly is that a problem? What's wrong with what we have traditionally referred to as consoles evolving into something better and more encompassing?

Because they fail at their primary purpose and all we get are shallow repeats of the same game every year (Halo, Forza, Gears)? If you dont think thats a problem to gamers, you havent been paying attention to the last few years of the Xbox.

Dot Matrix said,

Not really a problem when you see that the consoles you have could play a bigger role in consumer tech. I personally think it's great that the XBox is expanding to play a larger role in my living room.

It is a problem when it impacts the library, as evidenced by Microsofts extremely poor games line up over the last few years.

Dot Matrix said,

Not really a problem when you see that the consoles you have could play a bigger role in consumer tech. I personally think it's great that the XBox is expanding to play a larger role in my living room.

As do I, but in an industry with such a hard core audience, you have to target them first. Something hard to do when you don't understand them as a company...

the better twin said,

Because they fail at their primary purpose and all we get are shallow repeats of the same game every year (Halo, Forza, Gears)? If you dont think thats a problem to gamers, you havent been paying attention to the last few years of the Xbox.

The XBox is an entertainment device, and has been for quite some time. It's only natural that as such, expands into new roles in the living room.

the better twin said,

Because they fail at their primary purpose and all we get are shallow repeats of the same game every year (Halo, Forza, Gears)? If you dont think thats a problem to gamers, you havent been paying attention to the last few years of the Xbox.
Where exactly is it failing at its primary purpose? Last I checked they showcased a fairly respectable number of new next gen AAA games. Xbox One is more than capable of continuing to fulfilling the purpose of playing games. It merely expands upon this base to reach new audiences and expand its user base. There is absolutely nothing wrong with this.

In terms of shallow repeats, given that the best selling is exactly that (COD XX), creating new original IP's is now a greater risk. One which some developers cannot afford to chance. Part of this issue rests with the gamers themselves (as proven by the market), and until those habits change it is completely unfair to place that blame at the feet of MS. Gamers themselves are part of the problem, but I don't expect them to admit that.

Dot Matrix said,

The XBox is an entertainment device, and has been for quite some time. It's only natural that as such, expands into new roles in the living room.


You fail to recognise (as do Microsoft it seems) that the Xbox became an entertainment device AFTER it saturated the gaming market. It succeeded because it had a strong fan base spending lots on content which allowed Microsoft to cut the price and appeal to an expanded audience. The Xbox One is targeting these consumers right out of the gate, ignoring the fact that they will not spend that amount on an entertainment device. Microsoft need to target the core gamer first and foremost, and to be honest they have alienated most of them.

dagamer34 said,
There are departments within divisions.

True, absolutely. But if the person in charge of XBox isn't able to adequately argue for it being a gaming device, or JLG disagrees, it will lose it's focus as the One did in it's initial reveal. I love all the features the One has, don't get me wrong, but it needs to be a gaming machine first, in order to secure that market.

the better twin said,

You fail to recognise (as do Microsoft it seems) that the Xbox became an entertainment device AFTER it saturated the gaming market. It succeeded because it had a strong fan base spending lots on content which allowed Microsoft to cut the price and appeal to an expanded audience. The Xbox One is targeting these consumers right out of the gate, ignoring the fact that they will not spend that amount on an entertainment device. Microsoft need to target the core gamer first and foremost, and to be honest they have alienated most of them.

How has it alienated anyone? Last I checked, the XBox was still a gaming console. It. Still. Plays. Games. Seesh.

Dot Matrix said,

How has it alienated anyone? Last I checked, the XBox was still a gaming console. It. Still. Plays. Games. Seesh.


DRM debacle, weaker than PS4, TV/American focus, more expensive.....
Hang on werent you arguing its an entertainment device a minute ago?
Again its about primary focus and as you have previously proven through your arguments, gaming is not primary to the console hence why many are justifiably put off.

the better twin said,

DRM debacle, weaker than PS4, TV/American focus, more expensive.....
Hang on werent you arguing its an entertainment device a minute ago?
Again its about primary focus and as you have previously proven through your arguments, gaming is not primary to the console hence why many are justifiably put off.

Complaining that the XBox has expanded its horizons past just gaming, is like complaining that the computer has expanded from just performing advanced mathematical calculations. Last I checked, the PC can still perform math, just as much as the XBox One can play games.

If you really want to play the "my hardware is bigger than yours" game, then by all means, buy a PS4.

Bad Man Duke said,
Where exactly is it failing at its primary purpose? Last I checked they showcased a fairly respectable number of new next gen AAA games. Xbox One is more than capable of continuing to fulfilling the purpose of playing games. It merely expands upon this base to reach new audiences and expand its user base. There is absolutely nothing wrong with this.

In terms of shallow repeats, given that the best selling is exactly that (COD XX), creating new original IP's is now a greater risk. One which some developers cannot afford to chance. Part of this issue rests with the gamers themselves (as proven by the market), and until those habits change it is completely unfair to place that blame at the feet of MS. Gamers themselves are part of the problem, but I don't expect them to admit that.


Theres nothing respectable about the launch lineup. Microsoft are relying on third parties and bought timed exclusives like DR3 (dont be surprised to see it end up on the PS4). So Microsoft are part of the problem but we shouldn't blame them? Thats some pretty strong defence work there.

Dot Matrix said,

Complaining that the XBox has expanded its horizons past just gaming, is like complaining that the computer has expanded from just performing advanced mathematical calculations. Last I checked, the PC can still perform math, just as much as the XBox One can play games.

If you really want to play the "my hardware is bigger than yours" game, then by all means, buy a PS4.


Terrible analogy. Nice try though.
The other features should be supplementary, not detract away from the primary purpose that many want to buy it for. Regardless; this has gone way off topic. My original point still stands. A lack of genuine gaming enthusiasts will only harm the Xbox One as can be seen since 2008 and all the news since the Xbox One was announced. A total shambles precisely because Microsoft don't understand their audience appointing corporate suits and yes men (or women). Microsoft backtracked with their tails between their legs, but this appointment shows theyve learnt nothing.

M_Lyons10 said,

True, absolutely. But if the person in charge of XBox isn't able to adequately argue for it being a gaming device, or JLG disagrees, it will lose it's focus as the One did in it's initial reveal. I love all the features the One has, don't get me wrong, but it needs to be a gaming machine first, in order to secure that market.

She's not known to be a dictator like Sinofsky was, it's not her way or the highway. We don't know who the new Xbox boss is now that Mattrick left actually since JLG is not directly overseeing the Xbox itself. It's been pointed out that the group covers lots of other hardware and also entertainment like music and videos. It's not just Xbox and games. At least this way the Xbox should be able to work better with the rest of MSs hardware. The 360 still doesn't play nice with a Windows Phone iirc, which doesn't make sense at all.

the better twin said,

DRM debacle
Did they screw that up to an extent? Sure. Did gamers themselves fail to even try to understand why and what benefits might come from it. Without question? Look at how gamers reacted when MS backed off but now have to disable the sharing feature as a result.

Games still wanted that feature without being capable of understanding how the two are clearly linked.

weaker than PS4
So? It clearly blows away the PS4 on certain features. Cross platform chatting alone is one such feature. Cloud feature set of Azure is light-years ahead of Gaikai.

TV/American focus,
Given that they are US based, wouldn't it then be clear that they are more readily capable of negotiating such agreements within their home market? Which by the way is also the home of their largest user base. Also never mind that it takes time to negotiate such deals with any provider given the arcane business model they are hell bent on protecting.

more expensive.....
Given that it includes the Kinect sensor, it's obvious that it would be more expensive. As a developer/gamer/technology enthusiast, that doesn't bother me in the least.

the better twin said,

Theres nothing respectable about the launch lineup. Microsoft are relying on third parties and bought timed exclusives like DR3 (dont be surprised to see it end up on the PS4). So Microsoft are part of the problem but we shouldn't blame them? Thats some pretty strong defence work there.
Seriously? Are you trying to put forth the argument that they shouldn't rely on independent third parties to drive the games themselves? Should either MS or Sony have absolute control over everything out there and dominate the developers?

That kind of argument is just simply ridiculous.

Bad Man Duke said,
Seriously? Are you trying to put forth the argument that they shouldn't rely on independent third parties to drive the games themselves? Should either MS or Sony have absolute control over everything out there and dominate the developers?

That kind of argument is just simply ridiculous.


No I would think I wouldnt have to spell it out. Why get an Xbox one when you can get the games on the PS4. Common sense really.

Bad Man Duke said,
Did they screw that up to an extent? Sure. Did gamers themselves fail to even try to understand why and what benefits might come from it. Without question? Look at how gamers reacted when MS backed off but now have to disable the sharing feature as a result.

Games still wanted that feature without being capable of understanding how the two are clearly linked.

So? It clearly blows away the PS4 on certain features. Cross platform chatting alone is one such feature. Cloud feature set of Azure is light-years ahead of Gaikai.

Given that they are US based, wouldn't it then be clear that they are more readily capable of negotiating such agreements within their home market? Which by the way is also the home of their largest user base. Also never mind that it takes time to negotiate such deals with any provider given the arcane business model they are hell bent on protecting.

Given that it includes the Kinect sensor, it's obvious that it would be more expensive. As a developer/gamer/technology enthusiast, that doesn't bother me in the least.

Oh please. Dont try to blame gamers for the shambles that Microsoft call PR. The family sharing plan was never outlined clearly and if people think Microsoft were going to allow people to share their games with 10 people then they are the epitome of deluded. Microsoft were unclear from the get go, bumbling about with no clear direction, saying they were restricting how games would work, no renting or sharing at launch and saying if you dont like it buy a 360.

Have the PS4's voice systems even been detailed. You dont get a headset with the Xbox, you do with the PS4 so I imagine they have plans to expand the functionality.

Theyre a global company, that excuse doesnt hold any water. Heck theyre only launching in a few countries. its **** poor planning by Microsoft. Just look at how theyre treating Asia.

Good for you. I dont want Kinect forced down my throat why should I have to pay extra to accommodate it?

the better twin said,

No I would think I wouldnt have to spell it out. Why get an Xbox one when you can get the games on the PS4. Common sense really.
If your reasoning was common sense it would be apparent to you that it goes both ways given that 3rd party titles will be available on both. Then again, if you are a real gamer, as you claim to argue, why limit yourself anyway? Why bother arguing for one or the other or simply just enjoy both? Why argue at all?

the better twin said,

Perhaps that's the problem.

With that Mentality perhaps we should go back to carrying PDA's and a separate cellphone to make calls. I mean technology always merge with time.

the better twin said,

Oh please. Dont try to blame gamers for the shambles that Microsoft call PR.

Wow. Are you seriously going to try to argue that gamers are collectively a group of people who take the time to rationally understand anything?

The family sharing plan was never outlined clearly and if people think Microsoft were going to allow people to share their games with 10 people then they are the epitome of deluded. Microsoft were unclear from the get go, bumbling about with no clear direction, saying they were restricting how games would work, no renting or sharing at launch and saying if you dont like it buy a 360.
Perhaps if you took the time to actually read what I wrote, you would have noticed that I acknowledged MS's part in the matter. Then again, your reaction displays that particular reactive mentality that gamers tend to exhibit. Gamers never even allowed them the chance to even explain anything before they began to bombard the Internet with mindless rants.

Have the PS4's voice systems even been detailed.
If you paid as much attention as you claimed, you would have noticed the talk about Skype, and now how group chatting is included in Xbox Gold memberships. Read between the lines, it isn't that hard.

You dont get a headset with the Xbox, you do with the PS4 so I imagine they have plans to expand the functionality.
Once again, if you took the time to do your research you might have noticed that it appears that existing headsets might work with the new console.

Just look at how theyre treating Asia.
You mean the region where they don't have nearly as much success as they do in North America or Europe? That reasoning doesn't take much to understand.

Good for you. I dont want Kinect forced down my throat why should I have to pay extra to accommodate it?
Once again, if you took the time to put it together you would understand that if they didn't include it that it wouldn't get support.

Why bother with reasoning when it is easier to rant?

the better twin said,

Theyre a global company, that excuse doesnt hold any water. Heck theyre only launching in a few countries. its **** poor planning by Microsoft. Just look at how theyre treating Asia.

You realize that releasing a product internationally isn't as easy as it sounds, do you? Each country operates differently, and that takes time to accommodate.

Dot Matrix said,

The XBox is an entertainment device, and has been for quite some time. It's only natural that as such, expands into new roles in the living room.


Personally I still believe that the, regrettably, butchered and now abandoned Media Center was a much better "tool" to dominate the entertainment; again it had the potential to be it.

Fritzly said,

Personally I still believe that the, regrettably, butchered and now abandoned Media Center was a much better "tool" to dominate the entertainment; again it had the potential to be it.

It had potential until MS let it's OEM partners make the hardware for it. We all see how that turned out in the end. Still this whole debate about media devices vs pure gaming systems. It's like some of you forget who started this whole shift in the first place. Who made their console a DVD player first? Sony. Who made their console a BD player and marketed it as the best one out at the time? Sony.

Sony has been making the Playstation just as much of an all-in-one entertainment device as MS has with the Xbox. At list with the Xbox One MS is once again pushing forward with more games, more exclusives, opening new studios to make first party exclusive games and so on. Yet it's somehow "not a games console" or something? *sigh* I honestly don't understand some people.

Agreed. I use my Xbox for both games and entertainment. I don't get how people are seeing as shifting away from gaming. They still have gaming as a core aspect, but plus some.

If you want better games get developers to produce better games. Although, the Microsoft Games Division should start pumping out some better IP's I do agree. However, most big name titles are now available for both consoles and moving down the road exclusives will be a thing of the past unless designed by Either Sony or Microsoft themselves.

GP007 said,

It had potential until MS let it's OEM partners make the hardware for it. We all see how that turned out in the end. Still this whole debate about media devices vs pure gaming systems. It's like some of you forget who started this whole shift in the first place. Who made their console a DVD player first? Sony. Who made their console a BD player and marketed it as the best one out at the time? Sony.

Sony has been making the Playstation just as much of an all-in-one entertainment device as MS has with the Xbox. At list with the Xbox One MS is once again pushing forward with more games, more exclusives, opening new studios to make first party exclusive games and so on. Yet it's somehow "not a games console" or something? *sigh* I honestly don't understand some people.

Actually I was not taking side in the debate about game device against entertainment device; I never used a console for game, I prefer the PC. My point was that, as an entertainment device, Media Center was, again potentially, by far superior than Xbox and PS4 for the simple fact that being software running on a PC is by far more flexible than a console. Just as an example: the ability to replace your HD and increase, at will, your DVR capabilities or the fact that Media Center you did not need anymore a cable box.

Fritzly said,

Actually I was not taking side in the debate about game device against entertainment device; I never used a console for game, I prefer the PC. My point was that, as an entertainment device, Media Center was, again potentially, by far superior than Xbox and PS4 for the simple fact that being software running on a PC is by far more flexible than a console. Just as an example: the ability to replace your HD and increase, at will, your DVR capabilities or the fact that Media Center you did not need anymore a cable box.

Not needing a cable box depended on who your provider was, Cable card was not as widely supported by providers as I think you think it was. It was also a pain to setup and get working. Also in the end, no one really wanted a tower PC box in their home. the HTPC market itself is even more of a niche market than the pure gaming console market is. I agree that it had potential but it didn't work out. Ugly looking hardware from PC OEMs doing it wrong once gain didn't help things. It needed to be more simple and streamlined like the Xbox basically is but it never happened. And again, providers are like the mob, they never gave you an easy way to use it, I'm sure a few did but it never worked out the way it had to for the majority of people to adopt it.

Studio384 said,
We are talking about a reorg of the worlds largest software company and you think that it's growing stock on this moment has nothing to do with that?

I didn't say it has nothing to do with it; i'm implying that this may not be the case. The news happened to soon for you to see a drastic shift in stock price imo. SolarCity is also up 1.85% right now...

AWilliams87 said,

I didn't say it has nothing to do with it; i'm implying that this may not be the case. The news happened to soon for you to see a drastic shift in stock price imo. SolarCity is also up 1.85% right now...

With the length of time, and detail, of these rumors, people had likely already made their mind up. So it shouldn't require time for the stock to take a run...

ZipZapRap said,
From all reports, JLG was a mini Steven Sinofky. Interesting to see how that pans out.

Anyway, looks like a solid reorg


She's just a yes girl as far as I understand.

ZipZapRap said,
From all reports, JLG was a mini Steven Sinofky. Interesting to see how that pans out.

Anyway, looks like a solid reorg

Why? Because she likes Metro? LMAO

That was the least of the issues with Steven Sinofsky, and she hasn't yet shown any of those characteristics as far as I'm aware...

ZipZapRap said,
From all reports, JLG was a mini Steven Sinofky. Interesting to see how that pans out.

Anyway, looks like a solid reorg


What reports are you reading?

Why 'mini Steven Sinofsky'?

Why not just say you think she has views and attitudes similar to Sinofsky, if that's what you do mean? Or what it is you do mean, since it's not quite clear.

singularity87 said,
Why 'mini Steven Sinofsky'?

Why not just say you think she has views and attitudes similar to Sinofsky, if that's what you do mean? Or what it is you do mean, since it's not quite clear.

Because "mini Steven Sinofky" means exactly the same thing, and is quicker to type.