Microsoft Shuffles Management; Senior Windows VP Allchin Retires - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Microsoft Shuffles Management; Senior Windows VP Allchin Retires

Microsoft announces a major reorganization that divides the company into three divisions, each led by its own president; and Jim Allchin, the veteran executive in charge of Windows Vista, said he will retire next year.

Microsoft Corp. on Tuesday announced a major reorganization that consolidates the company's operations into three divisions, a move that follows sharp criticism that the company's internal operations were hampering its effectiveness and chasing away employees.

In addition, the Redmond, Wash., software giant announced the retirement of Jim Allchin, the well-respected head of Windows development. Allchin plans to leave the company at the end of next year, following the release of Windows Vista, the next generation of the computer operating system.

Under the reorganization, the Platform Products and Services Division will include the Windows client, server and tools unit, and the company's MSN portal. Kevin Johnson and Allchin will lead the division as co-presidents.

The Business Division, led by Jeff Raikes, will comprise the current Information Worker collaboration-software business and its Business Solutions unit, which include the company's business software for small and medium-sized companies.

The Entertainment and Devices Division will combine the Home and Entertainment and the Mobile and Embedded Devices divisions. The combination is expected to improve Microsoft's work in providing software and services for mobile devices. Robbie Bach will be president of the new unit.

In addition, Ray Ozzie, chief technical officer for Microsoft, will also be responsible for helping drive the company's software-based services strategy and implement that strategy across all three divisions.

"These changes are designed to align our Business Groups in a way that will enhance decision-making and speed of execution, as well as help us continue to deliver the types of products and services our customers want most,” Steve Ballmer, chief executive of Microsoft, said in a statement.

The reorganization followed on the heels of reports of severe criticism by some Microsoft employees of its internal operations. The discontent has led to defections, with 100 former employees now working for rival Google Inc., and dozens of others finding jobs elsewhere, according to a recent cover story in BusinessWeek magazine.

Among the highest-profile defections was Kai-Fu Lee, a former vice president of Microsoft's speech technology division who left to head Google's research and development center in China.

Microsoft sued Google and Lee, accusing the latter of violating the non-compete clause in his contract. During a recent hearing in the case, which is still pending, Lee testified that the company was "incompetent," which contributed to his decision to leave.

Microsoft believes the reorganization will lead to better products, closer collaboration among development projects and speedier product development. But at least one expert was skeptical.

"From my perspective, I'm not sure why a new organizational structure is needed to accomplish that," Joe Wilcox, analyst for JupiterResearch, said.

Wilcox sees the changes as creating another layer of bureaucracy, given the former business units will remain intact and continue to report their own profits and losses.

"It looks to me that Microsoft has added another layer of bureaucracy," Wilcox said. "At a time when startups are starting to show some real promise again, Microsoft now looks even bigger and potentially slower than it was before."

Rob Helm, analyst for Directions on Microsoft, questioned the timing of the changes, which are occurring in the middle of some major projects for Microsoft, particularly next year's planned release of Vista. Helm said the time was "a matter of concern."

"There are some pretty important platform products coming down the pike," he said. "It's striking that they would make this kind of change at this point."

Helm believes the departure of Allchin is probably what drove the reorganization.

"Jim Allchin has certainly earned the right to ride into the sunset, but this will be a tough transition," Helm said. "More than anyone else, he's been responsible for putting Microsoft in a leading position in the enterprise and networking space."

In announcing the changes, Ballmer said the company saw a "new era of opportunity" by weaving both software and Internet services into products.

"By bringing together the software experience and the service experience, we will better address the changing needs of our customers’ digital lifestyles and the new world of work,” Ballmer said.

For example, the platform division includes Windows development and the company's MSN portal, which points to the company's intent to tie its desktop platform closer to MSN. The portal has been evolving as a platform that web developers can use to draw services into their own applications.

MSN and rivals Yahoo Inc. and Google have increased the number of application programming interfaces available to developers for calling services.

TechWeb's Gregg Keizer contributed to this report.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
10 Ways to Transition Traditional IT Talent to Cloud Talent
Lisa Morgan, Freelance Writer,  11/23/2020
What Comes Next for the COVID-19 Computing Consortium
Joao-Pierre S. Ruth, Senior Writer,  11/24/2020
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Register for InformationWeek Newsletters
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll