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Microsoft Restructuring Not Necessarily for the Better

It remains to be seen if Microsoft‘s new restructuring plan will help make the company more competitive against Google and Apple in the mobile space, but at least one industry insider is skeptical that this will improve the Redmond, Wash.-based software giant’s position.

CEO Steve Ballmer announced in a memo last week that Microsoft’s eight product divisions will be pared down into just four that focus on operating systems, apps, the cloud and devices. Devices like the Surface tablet and Xbox gaming console will be handled under one roof, for example.

Im skeptical that this type of functional reorganization will change Microsofts business results for the better,” noted Yankee Group VP of Research Carl Howe, commenting specifically on a New York Times article. “What actually happens after one of these massive reorgs is everyone spends three to six months figuring out who they report to and what that person wants, as well as recreating their and their groups work around their new mission. The problem with these activities is that they focus everyone on internal issues instead of on delivering products and services to customers, and that rarely improves the top or bottom line.”

This latest reorg comes after previous, post-Bill Gates attempts to make the company more competitive. Those shifts took place in 2002, 2005, 2006, 2007, 2008, 2010 and 2012.

“Microsofts business for the past 30 years has been about building out the Wintel PC ecosystem of Office applications on the Windows OS running on Intel processors,” added Howe. “Whats happening now is that that ecosystem is reaching its end of life and is being replaced by vertically integrated mobile ecosystems controlled by Apple and Google. Putting all software under one roof and services under another isnt going to help Microsoft bridge the oceans between those massive islands. Until it starts selling all those functional components as one unified experience, Microsofts going to have a very rough time in the mobile market.”

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