Allchin Explains Decision To Employees

Microsoft exec Jim Allchin, in a letter to his team, stressed his belief that Microsoft "remains the place to be" for software development and having an impact on the tech sector.

Microsoft disclosed earlier today that Allchin, group vice president of platforms, will retire at the end of next year, after the Windows Vista client ships. In the interim he and Kevin Johnson will both lead the newly named Platforms, Products and Services group, one of three divisions formed in a new reorganization as co-presidents.

Allchin also alluded to a medical condition he suffered two-and-a-half years ago that caused him to take a step back and consider his options. He said he is well now.

"Make no mistake about it. I love this company. I love the progress we are making," he wrote in the e-mail, which was copied to reporters. "Windows Vista will be awesome. We're getting good feedback on beta 1 and the PDC was a great success you can all be proud of—these are exciting times."

"One day (a long time from now) there will be a retirement, mail but this is not it," Allchin wrote. He signed off: "Now, Ship! Ship! Ship!"

A former Microsoft insider still close to the company said that it was apparent that Allchin was ready to leave last year but was convinced to stay on. Then, in recent months, there were new rumors about his departure. "He wanted to go out on an up note, not on delays and etc.," this source said.

At Microsoft's Professional Developers Conference in Los Angeles last week, Allchin and Microsoft reaffirmed that Vista will ship next year and the Longhorn Windows Server the following year. The company also plans to ship long-awaited SQL Server 2005 and Visual Studio 2005 in November after many delays.

Partners are evaluating the news. "The reorganization looks to be a good consolidation move on the part of Microsoft. It’s too early to say the impact to the partners. Jim Allchin is a well-known and well-received executive, however, Kevin Johnson is equally respected, and a lot of partners had interaction with him in his previous role. I think having a year to transition from Jim to Kevin promotes stability. Eric Rudder moving over to Bill [Gates] is also a good move," said Ken Winell, CTO of Vis.Align, a Microsoft solution provider in West Chester, Pa.

Margaret Lewis, director of commercial solutions for chip maker AMD, an increasingly close Microsoft hardware partner, said in some ways it's amazing top Microsoft executives stick around as long as they do, given the work ethic there. "This is not a company of slackers. These people work very hard," she noted.

As part of the reorg, announced in an internal e-mail by Microsoft CEO Steve Ballmer, Eric Rudder will move into a new role focusing "key advanced development efforts as well as overall technical strategy," according to the message. "Eric will transition into his new role following the launch of Visual Studio and SQL Server 2005 later this year," Ballmer wrote.

One VMWare partner observed that the reorganization may impact his business and his Windows-based customers, but Microsoft shifts gears annually. He doubted the Allchin move will have any direct impact because his business is based primarily on the Windows server, not the client. "It's important to wait and see how it shakes out, but anything that puts the company's development teams closer to Microsoft customers is better," said John Dodge, a solutions architect at Foedus, a solution provider in Portsmouth, N.H. "Microsoft is dynamic and reactive to its clients, and I've seen over the course of time Microsoft change its operations.

The reorganization and departure of the key Windows executive comes as Microsoft struggles to push more Windows XP and Office desktop sales.

One partner who requested anonymity said moving from many divisions to three core units will improve the product development process and reduce intra-division infighting that has slowed product releases. Another partner agreed that the reorg makes sense based on Microsoft's core constituencies.

"This seems a well thought out and logical move. In my opinion, this move from seven business units to three aligns with their core value propositions to three different buyer segments--corporate IT, line of business and the consumer public," said Bart Hammond, CEO of Interlink, Englewood, Colo. "We will still need to work across these divisions," he said. "However, that is no different than today--perhaps simpler."

This story was updated Tuesday evening with additional partner quotes.