Microsoft instigates sweeping changes for senior management

Microsoft's chief executive has announced sweeping changes as the company tries to streamline business decision making and improve product development.

In an email to company employees yesterday, Microsoft chief executive Steve Ballmer wrote: "Our goal in making these changes is to enable Microsoft to achieve greater agility in managing the incredible growth ahead and executing our software-based services strategy."

According to US website CNET, the reorganisation will see the creation of three large divisions, each led by individual presidents. Aside from the numerous promotions and managerial changes the new plans will result in, Ballmer intends to move closer towards hosted software-based services.

Robbie Bach will be promoted to president of the Entertainment and Devices division, reporting directly to Ballmer. His new role will encompass overseeing the development of all games and mobile devices.

Jeff Raikes will take over the Business division, incorporating the Information Worker group (including Microsoft Office) and the Business Solutions packaged applications group.

The Platform Products and Services division will include Windows Server and Tools, Client, and MSN divisions. The division will be overseen by co-presidents Jim Allchin and Kevin Johnson. When the company ships its Windows Vista operating system at the end of 2006, Allchin is due to retire.

Bringing the MSN group into its main product unit further emphasises Ballmer's desire for a faster development towards hosted software services. Chief technology officer Ray Ozzie, who joined the company earlier this year, will expand his role in a bid to drive the software services strategy.

"Under Ray's technical leadership and weaving together both software and software-based services, I see incredible opportunity to better address the changing needs of our customers' digital lifestyles and the new world of work," Ballmer wrote in his e-mail to staff.

Another significant promotion as part of the reorganisation is that of Eric Rudder, who will focus on the overall technical strategy of the company and report directly to Bill Gates. Rudder, who has been regarded by some observers as a future leader of the organisation, currently heads the Server and Tools division. He will move into his new role later this year, following the shipment of new versions of Microsoft's Visual Studio development tools and SQL Server database.

Following the changes, the new Platform Products and Services division will cover roughly 60 percent of Microsoft's revenue. The Business division will cover roughly 30 percent, leaving 10 percent covered by the Entertainment and Devices Division.