Microsoft CEO, Steve Ballmer, presents his pre-show keynote at the 2010 International CES in Las... [+]
Ballmer has been at the helm of
Kara Swisher reported this week on AllThingsD that Microsoft is poised to implement a major restructuring of its business units. Swisher stated that details are sketchy and could still change substantially, but that sources have told her the new Microsoft could include larger roles for Satya Nadella, president of the Servers and Tools division; Tony Bates, president of the Skype communications division; and Don Mattrick, president of the Interactive Entertainment division.
Rob Enderle, principal analyst with the Enderle Group and someone who has close ties with many of the executives at Microsoft, told me he has no direct knowledge to confirm or deny the report, but he believes that the speculation is most likely accurate. Enderle relayed a story illustrating that this has been a goal of Ballmer's since day one. "I met with him just prior to his getting the top job and he made it clear that he was well aware that the market was moving to a device/service model and wanted to restructure the company to address this opportunity."
If that's true, then why now? Why has it taken 13 years for Ballmer to build up to a shift that he envisioned over a decade ago, and which is long overdue given the struggles Microsoft has faced from competitors in recent years?
The answer to that question may lie in the recent exodus of executive leadership. Starting with Robbie Bach (head of video games and mobile phone unit) and Stephen Elop (head of Microsoft Office division) in 2010, and continuing through Steven Sinofsky (head of the Windows unit) departing in late 2012, and the recent exit of Chief Financial Officer Pete Klein, there has been an almost complete changing of the guard in the upper echelons of Microsoft. In their wake, Ballmer has had an opportunity to hand-pick leaders who fit into his grand scheme.
Enderle explains that Ballmer simply didn't have the support. There was already an entrenched culture at Microsoft, with powerful leaders and conflicting agendas. Rather than risk doing more harm than good by forcing the issue, Ballmer deferred to the executives under him and waited patiently. "But these hard liners are gone now and he has a team that appears loyal to him so is able to execute and I think this leak indicates he is doing exactly that."
Microsoft is a corporate behemoth. One can hardly accuse a company the size of Microsoft of being nimble or agile when it comes to addressing shifting challenges in the market. On the contrary, companies the size of Microsoft are often victims of their own hubris--locked in to an outdated view of the world, and too cocky to even acknowledge a competitive threat until it's too late.
It's a good idea for Microsoft to adapt and restructure to be more competitive. Only time will tell, though, if such a move will be pure brilliance and maintain Microsoft's dominant position in the tech world, or if it's a gasping act of desperation--too little, too late to make a difference as younger rivals take over.
