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The Reorganization Of Microsoft: Just in time or too late?

Microsoft has done significant damage markets it helped to create. Could Balmer's reorganization get Microsoft back on track?


With the release of two memos totaling nearly 6000 words, Microsoft’s CEO Steve Ballmer announced how his company would be restructuring itself in an attempt to become more focused on cross-platform, forward thinking product offerings. This reorganization is focused on attacking the notoriously rigid hierarchy within Microsoft organizational structure by flatting it out into focused groups that report directly to Ballmer.

At the highest levels, Microsoft will be reorganized into groups focused on marketing, business development and evangelism, advanced strategy and research, HR, legal, and COO. Each of these groups will report directly to Ballmer and are designed to support the engineering team that is now split into four groups: Operating Systems, Applications, Cloud, and Devices. The hope is that the new organization will allow for more synergy across disciplines and reduce the competitiveness and derision between product groups.

Too little, Too Late?

Microsoft is flailing about. In the last year, during the two most important new product offerings, the company has failed to recognize the needs of it’s consumers and stubbornly released products that go against the prevailing market forces. Then to complicate matters, the company either back-peddles immediately, as it did with the Xbox One, or releases a Band-Aid designed to placate consumers instead of addressing the underlying cause, as it did with the Windows 8.1 start button that does not have a start menu.

As another example, consider Windows 7. Windows 7 was hailed as a new direction for Microsoft and the operating system was well received and enjoyed widespread use and adoption. This operating system answered many concerns of Microsoft’s consumers and actively advanced security and stability. Then Microsoft decided that the world needed to change the way it interfaced with it’s products and moved to a touch-focused system designed around a 10-inch tablet screen.

This choice threw away all the advances that made Windows 7 a consumer darling and pushed forward with the new direction while disregarding focus group and consumer concern over the changes. Microsoft, as a company, decided it knew what was best for its consumers and now Microsoft is reaping its own rewards.

Microsoft is also notorious for having an internal organization that is beholden to the two main sources of income: Windows and Office. This corporate structure is predicated on protecting the earnings of these two divisions at all costs and has stunted the growth of innovation while killing off many new or needed advances.

The Windows and Office teams only recognize large sweeping changes and are known to look upon small, incremental changes as too time consuming and unnecessary. This focus allows bugs and problems to hamper product uses while waiting to introduce bloated upgrades that normally add new and unwanted functionality while not directly repairing the existing problems.

Could this be The End?

Microsoft has done significant damage to the market it helped to create. Currently, the personal computing market is suffering it’s fifth straight quarterly decline, the Xbox One is squandering away it’s hard-fought market lead to Sony, and Windows 8 is enjoying a Windows Vista-like adoption rate.

The time is now for sweeping changes at Microsoft. If the company continues down this road of self-destructive product releases and marketing disasters consumers will find something new that works and flock there, leaving Microsoft behind like the dinosaur it has become.

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