Microsoft Shakeup Ballmer's Last Chance? - 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.

IoT
IoT
Mobile // Mobile Devices

Microsoft Shakeup Ballmer's Last Chance?

CEO revamps hardware unit in what may be final opportunity to turnaround mobile and entertainment business.

Microsoft CEO Steve Ballmer put his credibility, and possibly his career at the software maker, on the line Tuesday with a bold reorganization of the company's struggling hardware unit.

Gone in the shakeup are Entertainment and Devices Division president Robbie Bach, a 22-year Redmond veteran who is "retiring" at age 48, and design and development senior VP J Allard.

With no replacement named for Bach, Ballmer now assumes more direct oversight of E&DD—which houses key consumer products like the Xbox, Zune, and Windows Mobile.

Microsoft is quickly losing ground to rivals like Apple and Google in the consumer segment, and Ballmer's revamp of the unit may be a last ditch effort to reverse the trend.

The stakes couldn't be higher. With mobile devices set to become the dominant computing platform in the coming years, a failure by Microsoft to keep up with the competition could make the company an also ran.

And it might also mark the end of Ballmer's decade-long tenure atop the company. He's got his work cut out.

Microsoft now holds just a 6.8% share of the mobile market, down from 10.2% a year ago, according to Gartner. Worse for Redmond is that strategic rival Google is making big strides in the sector with its Android-based devices, even as Windows Mobile slumps.

The ED&D unit as a whole isn't faring much better. In the first nine months of Microsoft's 2010 fiscal year, hardware and hardware-related sales were down 5% year-over-year, to $6.5 billion. Xbox and PC game revenue fell 5% during that period, while Windows Mobile and Zune revenue was off 4%.

For Ballmer, those numbers add up to desperation—and the CEO acknowledged that the decision to let Bach walk wasn't an easy one.

"Robbie's an amazing business person and a close personal friend, which makes his departure a point of sadness for me," said Ballmer, in a statement. Bach's reports—Interactive Entertainment Business senior VP Don Mattrick and Mobile Communications senior VP Andy Lees will now report directly to Ballmer.

Presumably, he'll accept no excuses from either. Ballmer, in turn, needs to deliver.

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
Slideshows
What Digital Transformation Is (And Isn't)
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/4/2019
Commentary
Watch Out for New Barriers to Faster Software Development
Lisa Morgan, Freelance Writer,  12/3/2019
Commentary
If DevOps Is So Awesome, Why Is Your Initiative Failing?
Guest Commentary, Guest Commentary,  12/2/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll