Major restructuring at Microsoft, focus on mobile

by Sharon Lobo    Jul 11, 2013


As the worldwide PC industry steadily declines, the pressure to ramp up Microsoft’s presence in the mobile space has been gradually increasing on CEO Steve Ballmer. So it is not surprising that a major management reorganization is scheduled to take place this Thursday.According to anonymus sources AllThingsD, the changes will shift the duties and responsibilities of many top Microsoft executives and are intended to eliminate overlap within the 98,000-employee company.

Recently, Bloomberg had reported that a new cloud computing and business-focused products unit would be headed by Satya Nadella, who currently oversees Microsoft’s server business. While, Julie Larson-Green, the current co-head of Microsoft’s Windows operating system business, will lead the company’s hardware efforts, including the Xbox video game console and the Surface tablets.

Today, in the emerging markets, inexpensive tablets have become the first computing device for many people, who at best are deferring the purchase of a PC. This is also accounting for the collapse of the mini notebook market. Furthermore, some even blame Windows 8 as the reason for the PC market’s decline.

In such a scenario, the Redmond giant, need to make some quick and tough decisions, especially cut its reliance on its software business, which is the foundation of its $74 billion annual revenue business.

Last October, in his annual letter to shareholders Ballmer announced last Microsoft now sees itself as a “devices and services” company, rather than a software maker. However, this is easier said than done. Since they partnered with Nokia a few years ago, Microsoft hasn’t been able to shake off the dominance Google’s Android and Apple’s iOS have in the mobile space.

Since it has joined the mobile race a bit too late, Microsoft will need to roll up it sleeves and do more than just a management reshuffling. To start with, it can consider catering to Blackberry’s market, the enterprise segment. The Blackberry OS 10 devices haven’t generated any major enthusiasm in the corporate segment. Furthermore, Google and Microsoft have been focused on the consumer market. This makes it easier for Microsoft to enter the corporate mobile space without much resistance. Additionally, Microsoft with its experience in developing products for the enterprise space makes it all the more prepared to address CIO’s concerns pertaining to BYOD.

While we wait for the actual management restructuring to take place, one can only hope it does transform Microsoft to be devices and services company.