Microsoft to start mobile revolution

ISTANBUL - Anatolia News Agency

Microsoft plans to streamline the development of products from Windows to tablets in five years to catch its rivals in mobile and cloud computing. REUTERS Photo

Microsoft Corp launched its biggest internal overhaul in five years to streamline the development of products from Windows to tablets, hoping to catch nimbler rivals in mobile and cloud computing.

Lack of coordination and infighting have hurt innovation within the $74 billion revenue, 98,000-employee organization, which hopes to accelerate the design of products that appeal to a new generation of users more accustomed to smartphones and tablets than laptops or desktop PCs.

Some analysts see Thursday’s moves, which include centralizing business-oriented functions such as marketing and research expenses under separate units, as helping shore up Ballmer’s control over the sprawling corporation.

Removing major responsibilities for profit and revenue accounting allows the main divisions to focus on innovative products and eliminates the fiefdoms - Windows, Office for instance - that may have encouraged infighting in recent years, analysts said.

“You don’t do a major reorganization like this unless you have some serious problems,” BGC analyst Colin Gillis said. “It consolidates power around the CEO.”

Development of Windows will now be folded into one group headed by Terry Myerson.

Julie Larson-Green, previously co-chief of the main Windows division, will oversee a new division charged with all hardware devices, from the Surface tablet to the Xbox.

Nearly all of the most senior managers have a new role after the reorganization, which did not include any major new hires.

The moves realign the company that helped revolutionize the personal computing industry in the 1980s into what Chief Executive Steve Ballmer calls a “devices and services” corporation - a nod to Apple Inc, which has surpassed it in profit and market value in recent years.It is also an implicit rejection of “software”, the business which Microsoft helped pioneer and drove the worldwide adoption of personal computing, but in which it faces stiff competition from new rivals that have popularized Internet-based services.

Executives told reporters and analysts on a conference call they did not plan layoffs for now.