Microsoft CEO Finally Reveals Company Reorganization

Microsoft CEO Steve Ballmer made public on Thursday an internal email sent to employees regarding changes in the senior leadership team at the company. Also made public is Microsoft's strategy document, Transforming Our Company, outlining a focus on creating a family of devices and services for individuals and businesses. It's a far-reaching alignment, Ballmer says, that will enable Microsoft to innovate with greater speed, efficiency and capability in a fast changing world.

"We are rallying behind a single strategy as one company — not a collection of divisional strategies," he writes. "Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands."

"We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders," he continues. "All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers."

Ballmer says that Microsoft will center its work on a business model based on partner and first-party devices with both consumer and enterprise services, optimization for "activities people value most", a family of devices powered by "a service-enabled shell", and design for enterprise extensibility and enterprise needs. These will be Microsoft's key guiding principles as the company designs and creates the next generation of new and "amazing" experiences.

Microsoft will be reorganized by function: Engineering (including supply chain and datacenters), Marketing, Business Development and Evangelism, Advanced Strategy and Research, Finance, HR, Legal, and COO (including field, support, commercial operations and IT). The Engineering department will be divided into four teams: OS, Apps, Cloud and Devices. Dynamics will be kept separate as it continues to need special focus and represents significant opportunity.

"We will consolidate our technologies coherently into these groups pulling together some things that have been spread out in our current BG structure like cloud infrastructure, operating systems, mail, and identity, to name a few," Ballmer states. "Some of these changes will involve putting things together and others will involve repartitioning the work, but in all instances we will be more coherent for our users and developers."

"Completing this process will take through the end of the calendar year as we figure things out and as we keep existing teams focused on current deliverables like Windows 8.1, Xbox One, Windows Phone, etc." he adds.

Below is the list of new groups yanked from Ballmer's email, and who will manage them. Ballmer also notes that Kurt DelBene will be retiring, and Craig Mundie will devote his time working on a special project for Ballmer until the end of the calendar year. Rick Rashid is moving into a new role driving core OS innovation in the operating systems group.

Operating Systems Engineering Group
Terry Myerson will lead this group, and it will span all our OS work for console, to mobile device, to PC, to back-end systems. The core cloud services for the operating system will be in this group.

Devices and Studios Engineering Group
Julie Larson-Green will lead this group and will have all hardware development and supply chain from the smallest to the largest devices we build. Julie will also take responsibility for our studios experiences including all games, music, video and other entertainment.

Applications and Services Engineering Group
Qi Lu will lead broad applications and services core technologies in productivity, communication, search and other information categories.

Cloud and Enterprise Engineering Group
Satya Nadella will lead development of our back-end technologies like datacenter, database and our specific technologies for enterprise IT scenarios and development tools. He will lead datacenter development, construction and operation.

Dynamics
Kirill Tatarinov will continue to run Dynamics as is, but his product leaders will dotted line report to Qi Lu, his marketing leader will dotted line report to Tami Reller and his sales leader will dotted line report to the COO group.

Advanced Strategy and Research Group
Eric Rudder will lead Research, Trustworthy Computing, teams focused on the intersection of technology and policy, and will drive our cross-company looks at key new technology trends.

Marketing Group
Tami Reller will lead all marketing with the field relationship as is today. Mark Penn will take a broad view of marketing strategy and will lead with Tami the newly centralized advertising and media functions.

COO
Kevin Turner will continue leading our worldwide sales, field marketing, services, support, and stores as well as IT, licensing and commercial operations.

Business Development and Evangelism Group
Tony Bates will focus on key partnerships especially our innovation partners (OEMs, silicon vendors, key developers, Yahoo, Nokia, etc.) and our broad work on evangelism and developer outreach. DPE, Corporate Strategy and the business development efforts formerly in the BGs will become part of this new group. OEM will remain in SMSG with Kevin Turner with a dotted line to Tony who will work closely with Nick Parker on key OEM relationships.

Finance Group
Amy Hood will centralize all product group finance organizations. SMSG finance, which is geographically diffuse, will report to Kevin Turner with a dotted line to Amy.

Legal and Group Corporate Affairs Group
Brad Smith will continue as General Counsel with responsibility for the company's legal and corporate affairs and will map his team to the new organization.

HR Group
Lisa Brummel will lead Human Resources and map her team to the new organization.