Microsoft announces major realignment

Redmond, Wash. -- In an internal email to all employees, Microsoft CEO Steve Ballmer announced a sweeping internal realignment he said will build upon a strategy launched last year to bring Microsoft more fully into the devices and services market.

The company will reduce emphasis on its traditional strong point of consumer and business software, such as the Windows OS and Office suite of desktop applications, and focus more on computing devices such as Xbox and Surface and on services delivered to mobile device users.

"Going forward, our strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most," Ballmer wrote to Microsoft's nearly 100,000 employees.

Microsoft will now be organized around the functional departments of engineering (including supply chain and datacenters), marketing, business development and evangelism, advanced strategy and research, finance, HR, legal, and COO (including field, support, commercial operations and IT). Engineering will be further divided into the four areas of OS, apps, cloud and devices, with Microsoft Dynamics enterprise and CRM applications remaining a separate area of focus.

As a result of the realignment, Microsoft is also attempting to create an internal culture more focused on engineering and collaboration across groups. Projects will be executed by teams that span groups, with a single champion overseeing all activities and reporting to Ballmer.
A number of executives have been given new roles as a result of the alignment.

Eric Rudder will lead the advanced strategy and research group, Tami Reller will lead the marketing group with Mark Penn taking a broad view of marketing strategy, and Kevin Turner will continue his role as COO in charge of the COO group. Tony Bates will head the business development and evangelism group, Amy Hood will run the finance group, and Brad Smith will continue as general counsel in charge of the legal and corporate affairs group. Lisa Brummel will head the HR group.

In other executive changes, former head of the Office division Kurt DelBene is retiring after more than 20 years with the company, Rick Rashid will step away from running Microsoft Research and move into a new role driving core OS innovation, and Ballmer’s chief adviser Craig Mundie will spend the rest of this year working a special project and then spend 2014 as a consultant before leaving as previously agreed upon.

“Today’s announcement will enable us to execute even better on our strategy to deliver a family of devices and services that best empower people for the activities they value most and the enterprise extensions and services that are most valuable to business,” Ballmer said in the email.