Steve Ballmer Planning “Significant Restructing” of Microsoft Leadership

Steve Ballmer

The winds of change are blowing at Microsoft this morning, with reports suggesting that we could be about to see a big shakeup in the upper echelons of the company’s management. Nothing is guaranteed, but according to All Things D’s Kara Swisher, the company is about to undertake a “significant restructuring process”, citing sources with knowledge of the matter.

According to Swisher’s sources, CEO Steve Ballmer is said to be planning a major reorganization that would cause a fundamental shift in the balance of power within the world’s largest software company. In fact, the changes will be so sweeping that it’ll no longer be a software company at all โ€“ instead Microsoft will officially transition into one that sells “devices and services”, claim Swisher’s sources.

Swisher adds that Ballmer already laid the foundations for such a transition last year when he penned a note to company shareholders explaining that “it truly is a new era at Microsoft”. In that letter, Ballmer pointed out that the firm was going to change its strategy, and increasingly focus on devices and services ahead of its traditional software products.

Of course, given that Windows and Office remain the company’s biggest money makers, these products certainly won’t be pushed aside โ€“ so how is Microsoft planning to restructure itself?

There are no answers yet, but Swisher says that a number of executives are set to be given more authority under the new regime. These include Don Mattrick, president of Microsoft’s Interactive Entertainment division, and Tony Bates, the current head of Skype.

Elsewhere, Infoword’s Woody Leonhard provides his own analysis of the situation, saying that as things stand Microsoft’s leadership is extremely lopsided at the moment. Currently, the firm has six ‘presidents’ of various departments that answer to Ballmer himself, but this setup seems to be very disorganized. For example, the heads of the Skype and Office departments wield far more power as “presidents” than running Microsoft’s Surface, Windows Phone, and Windows departments.

Leonhard argues that this is a very odd mix indeed, and one that could undermine any transition to a “devices and services” company. To resolve this, Leonhard claims that Ballmer could decide to nominate executive-level presidents for the “devices” and “services” branches. He observes that both Mattrick and current Windows Phone cheif Andy Lees are well positioned to take over as head of “devices” at the company. In this scenario, Mattrick probably has the upper hand due to his success with the Xbox, though Lees could still get the nod as he’s closer to Ballmer. Meanwhile, Leonhard claims that the current Server & Tools president Satya Nadella seems best positioned to take on the role of “services” head.

Nothing is certain, but this wouldn’t be the first time that Microsoft has made sweeping changes in order to revitalize itself โ€“ don’t forget that it did a similar thing back in the mid 1990s when it missed the internet.