A couple of years ago, a satirical set of diagrams depicting the organization of Amazon, Apple, Facebook, and other technology companies made the rounds on the Internet. The chart for Microsoft showed several isolated pyramids representing its divisions, each with a cartoon pistol aimed at the other.
Its divisions will war no more, Microsoft said Thursday.
Microsoft said it would dissolve its eight product divisions in favor of four new ones arranged around broader themes, a change meant to encourage greater collaboration as competitors like Apple and Google outflank it in the mobile and Internet markets. Steven A. Ballmer, the longtime chief executive, will shuffle the responsibilities of nearly every senior member of his executive bench as a result.
“To execute, we’ve got to move from multiple Microsofts to one Microsoft,” Ballmer said.
It remains to be seen whether more cohesive teamwork, if that is what results from all the movement, will offer the spark that has been missing from so many of Microsoft’s products in recent years.
The company has been widely faulted for being late with compelling products in two lucrative categories, smartphones and tablets. Its Bing search engine is a distant second to Google and loses billions of dollars a year for Microsoft.
Rivalries among the company’s divisions have built up over time, sometimes resulting in needless duplication of efforts. Microsoft managers often grumble privately that one of the most dreaded circumstances at the company is having to “take a dependency” on another group at the company for a piece of software, placing them at the mercy of someone else’s development schedule.
Product development groups will sometimes go to great lengths to avoid this, creating software —
While its old divisions all had their own finance and marketing organizations, Microsoft is now centralizing those functions. The new divisions are meant to effectively force its groups to work more closely together to create complete products consisting of hardware, software, and services.
“This is, in my mind, the biggest thing we’ve ever done,” said Lisa Brummel, a 24-year Microsoft veteran who leads its human resources department, pointing out that the company has nearly 100,000 employees.
Among the top executives named to new roles is Julie Larson-Green, who had overseen the development of the Windows operating system, will lead a new devices and studio group that consists of Xbox hardware, the Surface family of tablet computers, hardware accessories and games.
Microsoft will consolidate all its major operating systems, including Windows, Windows Phone, and the software that powers the Xbox, under Terry Myerson, who handled engineering for only Windows Phone before.
Qi Lu, the head of Bing and Microsoft’s other Internet initiatives, will take over a new applications group and oversee the company’s lucrative Office franchise and Skype.
Satya Nadella, as the head of the new cloud and enterprise group, will manage the network of data centers that power all of Microsoft’s online services, in addition to Windows Azure, the cloud service he has been running for some time.
In addition to changes to its product groups, Tony Bates, the former president of the Skype division, will be in charge of business development and relations with developers, along with mergers and acquisitions.