The company also announced that Jim Allchin, a 15-year company veteran who before the reorganization was head of Microsoft’s Platforms Division, will retire at the end of 2006, following the release of Windows Vista.
Allchin will act as co-president of a new Platform Products & Services Division with Kevin Johnson, formerly head of worldwide sales, who will take over the unit solo following Allchin’s departure.
This division is the largest of the three new operating units. The Client, Server and Tools, and MSN divisions that are being combined had collective revenue of almost $25bn in Microsoft’s fiscal 2005, which ended June 30.
This group will be responsible for developing the Windows client and server operating systems, as well as other server platforms such as SQL Server 2005 and developer tools such as Visual Studio.
There’s an expanded role for Ray Ozzie, former head of Groove Networks, under the new structure. One of the firm’s three chief technical officers, he will help drive its software-based services strategy and execution across all three divisions.
The fact that the consumer-oriented MSN internet services group is also being included in this Platforms division is telling, and points to one of Microsoft’s next key battlegrounds – the blurring line between web services and the desktop.
We are focused on creating exciting user experiences and enabling developers to build great applications with the combination of software and software-based services, chief executive Steve Ballmer said in a statement.
As MSN’s rivals, chiefly Yahoo! and Google, increasing invade the desktop through search, voice and other applications, there’s a longer-term danger that Microsoft will be unable to add sufficient new features to persuade Windows users to upgrade.
Microsoft watchers have paid more attention to this threat during the past few months, as Google has started unveiling new products – such as Google Desktop, which preempts the search features of Vista – at a rapid clip.
Microsoft will also combine the $11bn-a-year Information Worker division with the $800m Microsoft Business Solutions services division into the new Business Division.
Information Worker was mainly Office sales, with some collaborative server software thrown in, while MBS was Microsoft’s smaller, younger enterprise software division, comprising business intelligence, ERP and CRM suites.
Jeff Raikes, former head of the larger Information Worker unit, will preside over this new division. Doug Burgum, senior vice president of MBS, will report to Mr Raikes.
The Mobile and Embedded Devices unit, which saw revenue of $337m in fiscal 2005, and the $3.2bn Home and Entertainment division, are being combined into a new Entertainment and Devices Division under the presidency of former Xbox head Robert Bach.
This consumer electronics focused segment comprises video games, mobile phone operating systems and software, keyboards and mice, and interactive television software. It also includes Microsoft’s Macintosh products.
