Rumor: Microsoft could reduce business units down to four divisions

On Monday, rumors hit the Internet that Microsoft CEO Steve Ballmer is leading the charge for a major management restructuring of the company. Microsoft has yet to confirm that such changes are being planned, but now more rumors claim that the reorganization could reduce the number of Microsoft's business divisions from eight to just four.

Bloomberg reports, via unnamed sources, that this particular plan would have Microsoft launch a new enterprise division headed up by Satya Nadella, the current head of Microsoft's server business. The second business unit would be in charge of Microsoft's hardware, to be headed by Don Mattrick, the current head of the Entertainment and Devices (i.e. Xbox) group.

The third proposed division would be in charge of applications and services, which would be lead by Qi Lu, the head of the current online division. Finally, there would be an operating systems business that would be run jointly led by Terry Myerson, the current head of Windows Phone, and Julie Larson-Green, who runs the Windows division.  Tony Bates, the current president of Microsoft's Skype business, would also have a "significant role" in the new Microsoft organization but the article did not give any further details.

As with the previous rumor on AllThingsD, this new Bloomberg story states that these changes are not yet final and could be altered when the final restructuring goes into effect.

Source: Bloomberg | Image via Microsoft

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This is what MS needs. WP should be in Windows division and Outlook.com and SkyDrive which are Services not Devices should not be in Windows and be moved to the new apps/services group. Windows & Windows Phone division is Devices, Hardware division is Devices, Enterprise is Services and Apps and Services is services. By the way, Office is a service now with Office 365. Julie Larson-Green should not be promoted any further because of her mistakes with Windows 8 (Julie was leader of Windows Program Managment and was responsible for all of Windows 8 as Sinofsky said in Build 2011 keynote 1 when he was introducing Julie) and Terry should be the new leader of the division as his Windows Phone division has not done crazy mistakes as Julie has when taking away the Start menu and button in Windows 8. All Julie knows how to do is replace and overhaul as had been done in Office 2007 and new ribbon, Windows 7 and the new taskbar and Windows 8 with a bold run for the tablet market. Julie also has a very hard time doing keynotes as was the case in the Build 2011 keynote when she was coughing and talking hardly clearly. That's probably why you don't see her at TechEd this year. It would be crazy to have her keynote at upcoming Build 2013. Terry has excelled at keynoting like Sinofsky and Nadella and Ballmer. Please don't promote Julie and fire her on the spot!

WinMetro said,
Terry should be the new leader of the division as his Windows Phone division has not done crazy mistakes as Julie has when taking away the Start menu and button in Windows 8.

To be honest right now I have more grievances about WP8 than W8.1. Granted I have no information about what WP8 Blue will bring therefore the use of "Right now".
BTW not trying to start WW III but I find the "Ribbon" a stellar improvement over "drop down" menus; I have never been a fan of keyboard shortcuts.

A fundamental question that remains unanswered. Will Satya Nadella have enough power/control over the Windows OS to make it truly enterprise friendly? Can she force the return of the traditional UI, as used in Windows-7, as an option during installation? Windows-8, with its Metro UI, clearly panders to the touch-centric consumer marketplace.

Will Bill Gates dream of a 'Fully Unified and Fully Integrated Microsoft' be achieved without having anymore MONOPOLY ACCUSATIONS thrown at the company...
Who are we kidding.... as long as the EU exist...

I'm a huge fan of Google... I can tolerate Apple to a degree... But when MS is on their A++ game... they just seem so ahead of the competition...

Its like MS waits until they are almost slaughtered and then kick into their A game...

Showan said,
Will Bill Gates dream of a 'Fully Unified and Fully Integrated Microsoft' be achieved without having anymore MONOPOLY ACCUSATIONS thrown at the company...
Who are we kidding.... as long as the EU exist...

I'm a huge fan of Google... I can tolerate Apple to a degree... But when MS is on their A++ game... they just seem so ahead of the competition...

Its like MS waits until they are almost slaughtered and then kick into their A game...

Like a Phoenix rising from its Ashes. People continuously underestimate Microsoft only to be proven wrong. Microsoft is like a stealth fighter. You don't know when it is on to you and by that time it's too late.

Sorry, sounds like a fanboy comment, but that is a fact well proven in the past.

As a european and a fan of Microsft, the fine MS got really hurted. I guess both parties behaved kind of childisch. Microsoft knew the comission was sensitive about the browser, and still they made the error that eventually cost them a lot of money. The EU wants to protect the consumers by decouraging monopolies, but the bowserproblem was really not that important, since browsers are free. It wasn't about he money, it was about sending a messsage.
btw, the eu was not the only one to sue MS:
http://en.wikipedia.org/wiki/United_States_v._Microsoft

All seems decent to me.
About time they restructures and folded several satellites in to the main group. I know nothing of running a company of this size but it seems like an awesome idea.

Julie Larson? One of the reasons Windows 8 looks like it does. That other person who is the CFO is the other reason Windows 8 looks as it does right now.

See where I am going?

Less divisions means more focus and quality. This is what the Feds asked GM to do. They dumped Pontiac as a result, which I think was lame but they claim it was the worse selling brand they had which was false. But it did help them focus on the rest and they are better for it. Though I felt they could have lost a few more. Microsoft needs to focus on less groups and more on product. Less people hopefully means more teen spirit.

This restructuring is very much needed... Call Balmer a dope (though he seems to be sometimes).... but this is a very good move...

Now he has to find a way to get the talent back (J. Allard perhaps)...


What I'm curious about is, how many 'sub-bosses' will these bosses have...???

thealexweb said,
Cunning to bury the online division's poor performance by combining with applications i.e. Office.

Hang on, let me just grab some straws for you to clutch at....

Mikeffer said,

Hang on, let me just grab some straws for you to clutch at....

Currently its in its own seperate division which allows for a greater insight in to how Bing, Outlook.com and the others are doing. Whatever division it becomes part of it will be easier to hide the truth.

thealexweb said,

Currently its in its own seperate division which allows for a greater insight in to how Bing, Outlook.com and the others are doing. Whatever division it becomes part of it will be easier to hide the truth.

and easier to manage, which is the point. No conspiracy.

If the Xbox goes into the hardware devision, what will happen with its OS('s)? Will they be developped there as well, or will some/all of them move to the OS devision?

I think putting them all in the OS devision would make it easier to create a truly unified experience.

Vital D'haveloose said,
If the Xbox goes into the hardware devision, what will happen with its OS('s)? Will they be developped there as well, or will some/all of them move to the OS devision?

I think putting them all in the OS devision would make it easier to create a truly unified experience.


Xbox runs Windows. It's just a locked down version of Windows with different colors and stripped down to the bare minimum because it only needs to support one tailor made computer. It wouldn't make any sense to develop a separate OS for a console when you have the complete source code for the largest OS in the world.

I got the impression it's "3" operating systems, but only 2 OS's. 1 is the Hyper-V which doesn't really count except to tie everything together and 2 is the WindowsRT, which is (excluding the desktop "app") what ships on Windows 8 currently.

The 3rd is their custom xbox gaming software.

That was my impression, I could be mistaken though.

Might be a good idea, what killed sony was a million different business factions not working together and fighting with each other. With 4 larger business structure it will make Ms easier to control and probably result in products coming to market quicker.

What keeps Sony alive is the fact that they created different business factions.

Diversification is the key of business continuity.

Sony isn't dead but it's coughing up blood. Not in good shape. I expect the Entertainment Division to be spun off over the next month or two and the rest left to fend for themselves. What's Japanese for "good luck with that"?

I like this idea... it simplifies the business a lot instead of all the divisions competing against each other, it would allow them work together better and get things done faster.

This could get interesting! About time they flatten a bit and get everything aligned. I just hope they keep great bridges built between the 4 groups so they're all absolutely positively on the same page instead of running around with their own pet projects

Saeb Msarwa said,
I hope it all goes as planned if it's true.

Seems easier and better this way, too much divisions means chaos, IMO.

Agreed. Especially as they are trying to get all of their divisions to work together...

M_Lyons10 said,

Agreed. Especially as they are trying to get all of their divisions to work together...

Which, no matter what kind of restructuring will be implemented, will be the hardest aspect to overcome. After pushing teams to compete against the others for years changing the behaviour will not be easy, less than ever an overnight task.

Microsoft said,
an operating systems business that would be run jointly led by Terry Myerson, the current head of Windows Phone, and Julie Larson-Green, who runs the Windows division.

id10ts. When will they learn that a phone O/S doesn't work on a desktop?