Microsoft Looks to Unifying Strategy to Revitalize Aging Company

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Microsoft announced Thursday a company-wide reorganization—its latest effort to revitalize the struggling brand. In an email to all employees, CEO Steve Ballmer said: 

“Today, 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.”

While the realignment involves no major departures or promotions for current executives, it does dissolve the company’s current business units and reorganizes them into four divisions: Operating Systems, Applications and Services, Cloud and Enterprise, and Devices and Studios. The move places the company’s three operating systems into one division, and stretches marketing and business strategy into a unified, cross-company group.[more]

“Microsoft’s goal with this reorg is to try to make itself into a more agile and responsive tech company.”  ZDnet notes. “As expected, there’s no separation along consumer/business lines with this new reorg. Microsoft execs are intent on blurring even further the lines between consumer and enterprise with its products and services.”

The changes, Microsoft hopes, will help propel the company back to its once-golden spot among internet and technology brands—and perhaps even past it. The brand has taken a beating from Apple and Google in its hardware, software and mobile divisions, while other forays, like Xbox, have proven to be increasingly disappointing as the gaming world experiences a monumental shift towards mobile. The company will instead move to be one focused on “devices and services,” perhaps a clue to its rumored interest in purchasing Barnes & Nobles’ floundering Nook tablet business, and more integrated, intuitive services, including Microsoft product boutiques inside Best Buys. 

“This is, in my mind, the biggest thing we’ve ever done,” said Lisa Brummel, a 24-year Microsoft veteran and head of HR, reports The New York Times

The transformation may already be taking hold in some places. “Now, some employees say, the company culture is becoming more collaborative, faster paced, and infused in places with what some are calling a ‘startup vibe’—a sense of being the underdog, of creating something experimental that has to be tested in the market, and a willingness to incorporate feedback into those experiments quickly,” the Seattle Times reports

The company will also be looking to adopt some of those practices of the nimble startups it acquires, says Scott Pitasky, a Microsoft corporate vice president in human resources. “[Now] We are a lot more aware of the culture of the companies that we are acquiring … not just what they’re doing but how they’re doing them,” he told the Times

Still, the company has a lot of changes to make, and too quick of a move could prove more detrimental than beneficial. “The most important thing may be that if Microsoft truly wishes to transform itself, that it recognizes just how long that process will take,” Charles King, principal analyst at consultancy Pund-IT told USA Today. “IBM’s shift from hardware to software leadership took the better part of a decade. Apple’s iPhone launch in 2007 came eleven years after Steve Jobs returned to the company in 1996. If Microsoft isn’t simply making cosmetic changes, it will need to show evidence of similar long-haul thinking and strategizing.”

As for what lies ahead, the company’s pared down divisions may likely lead to layoffs and an uncertain succession plan for its 57-year-old CEO. “Whether I’m here a year, or here 10 years, or here three months, or here 20 years, whatever it is, this is the right set of decisions for this company,” Ballmer said. 

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