More Details Emerge in Coming Massive Reorg at Microsoft

Earlier this month, I confirmed a Wall Street Journal report about a coming massive reorganization of Microsoft that will see the firm realign its internal businesses around devices and services. This week, more details have emerged about this reorg, which will be detailed to the company's senior executives before July 1.

Please refer to "Microsoft Preps Major Restructuring" for my first report about this coming change. In that article, I noted that the reorg would almost certainly be publicly announced by or at Microsoft’s July Microsoft Global Exchange (MGX) conference. This week’s update coincides with that information, with the Wall Street Journal noting that Microsoft CEO Steve Ballmer would reveal his plans for the reorg to senior company executives by the end of June, ahead of the July public unveiling.

But the Wall Street Journal also hints at an internal soap opera around the controversial reorg.

“Ballmer has been making these significant plans with limited consultation with the wider leadership group at the software giant,” the report states. “He has been working with only a small group of his direct reports and also some Microsoft board members, numerous sources said.”

This means that Ballmer is essentially fashioning a new internal structure for Microsoft without consulting with many of the top executives who will be most directly affected by the changes.

“It feels like it is going to be titanic,” one source allegedly told the Wall Street Journal. “Steve [Ballmer] is doing this change for his legacy. And it’s the first time in a long time that it feels like that there will be some major shifts, including some departures.”

Actually, it hasn’t been that long: Divisive former Windows chief Steve Sinofsky suddenly left the company in late 2012. And during his six-year reign, numerous long-time top executives left Microsoft, many because of Sinofsky’s aggressively dictatorial policies.

But no matter. This massive reorg could overshadow any other internal change at Microsoft by a wide margin.

My sources have told me that the reorg would result in two primary divisions that map directly to Microsoft’s “services and devices” direction. The services part of the company would be run by current Server and Tools president Satya Nadella, and the devices part would be run by current Windows co-chief Julie Larson-Green, I was told. But the Wall Street Journal correctly notes that the plan has shifted repeatedly, and it’s entirely possible that Larson-Green’s strange performance at a public event last month doomed her chances.

The Wall Street Journal never mentions Larson-Green, but instead offers up Mr. Nadella, Skype president Tony Bates, and even Interactive Entertainment Division President Don Mattrick as possible leaders under a new corporate structure. Mattrick, however, just flamed out at the Xbox One launch.

We should know soon.

Related: "Microsoft Announces Leadership Change: Sinofsky Out!"