Microsoft’s Reorg: Who Will Take the Lead in Massive Corporate Shakeup

by Darryl K. Taft

Ballmer retains his role as CEO and architect of this reorg. Despite the increasing buzz from a subsection of the crowd of onlookers and shareholders calling for his head, Ballmer remains firmly in control of Microsoft. The “One Microsoft” theme was a long time coming. Having healthy competition among the ranks can be a good thing, but not so good when it held back progress or when it was so apparent that competitors were able to exploit it. So Ballmer remains entrenched. Or as D’Angelo Barksdale said in explaining the game of chess to his underling in an eponymously named episode of HBO’s “The Wire”: “The king stay the king, a’ight?” Indeed, in this case, the king stay the king.

Terry Myerson will lead this group as executive vice president of operating systems, and it will span all Microsoft’s OS work, from console, to mobile device, to PC, to back-end systems. The core cloud services for the OS will be in this group. Myerson and his team are responsible for building the software platform and experiences that are showcased in Windows, Windows Phone and Xbox devices worldwide. Prior to leading the Operating Systems group, Myerson led the Windows Phone Division. That in itself is enough to have outsiders questioning the selection of Myerson for this role. Why put the guy who couldn’t make a go of it with Windows Phone in charge of the entire OS organization? Ballmer has his reasons, so we’ll see. Myerson’s been with the company since 1997. During his tenure, Myerson led the Exchange team for eight years, during which it became the world’s most popular business communications system.

Julie Larson-Green will lead this group as executive vice president of devices and studios and will have all hardware development and supply chain from the smallest to the largest devices Microsoft builds. Julie will also take responsibility for the company’s studios experiences, including all games, music, video and other entertainment. In 20 years at Microsoft, Larson-Green has been involved in defining products and customer experiences that touch more than a billion people, from developer tools in her early years to multiple versions of Internet Explorer, Office and Windows. Larson-Green most recently led the product planning, design and delivery of Windows 7, Windows 8 and Windows 8.1. Larson-Green is a Steven Sinofsky disciple who will likely bring some of his “software factory” style of management to help churn out products in an area where pace and delivery are paramount. This is a big role in the new Microsoft and though some say it’s as demotion, I see it as a win.

As executive vice president of Microsoft’s Applications and Services Group, Dr. Qi Lu leads Microsoft’s business across productivity, communications, search and other information services. He sets the vision, strategy, and overall direction of the Applications and Services group, and is responsible for all of the research and development teams across Microsoft Office, Office 365, SharePoint, Exchange, Yammer, Lync, Skype, Bing, Bing Apps, MSN and the Advertising platforms and business group. Until recently, Lu was the president of the Online Services Division, where he led the company’s search, portal and online advertising efforts. Prior to joining Microsoft, Lu spent 10 years as a Yahoo senior executive. Lu is a good fit for this role and will serve Microsoft well.

Satya Nadella is executive vice president of Microsoft’s Cloud and Enterprise group, responsible for building and running the company’s computing platforms, developer tools and cloud services. Nadella and his team deliver the “Cloud OS,” Microsoft’s next-generation backend platform. Previously, Nadella was president of Microsoft’s $19 billion Server and Tools Business and led the transformation of the business and technology from client-server software to cloud infrastructure and services. Nadella will lead development of Microsoft’s back-end technologies like data center, database and the company’s technologies for enterprise IT scenarios and development tools. He will lead data center development, construction and operation. Having run Server and Tools for some time now, Nadella is well into the role and knows the ropes. He is a polished exec and has a solid team supporting him.

Kirill Tatarinov will continue to run Dynamics as is, but his product leaders will dotted-line report to Qi Lu, his marketing leader will dotted-line report to Tami Reller, and his sales leader will dotted-line report to the COO group. Kirill Tatarinov is executive vice president of the Microsoft Business Solutions Group, responsible for the Microsoft Dynamics business across development, sales, marketing and operations. Microsoft Dynamics is a set of business solutions for scenarios, including customer relationship, supply chain and financial management (CRM and ERP) that bring simplicity, value and agility to organizations of all sizes. Before joining MBS in 2007, Tatarinov led the Management and Solutions Division at Microsoft, where he was in charge of the Microsoft Windows management technologies and products, including Microsoft System Center, as well as Windows Server solutions. This move is business as usual.

Eric Rudder will lead Research, Trustworthy Computing, teams focused on the intersection of technology and policy, and will drive Microsoft’s cross-company looks at key new technology trends. As executive vice president of Microsoft’s Advanced Strategy and Research group, Rudder oversees Microsoft Research, one of the world’s premier computer science research organizations, as well as the company’s Trustworthy Computing group, Technology Policy group, Startup Business group, and the Strategic Software and Silicon Architectures team. Previously, Rudder served as senior vice president of Server and Tools and was responsible for leading the company’s outreach to the developer community. Rudder and his team delivered the overall programming model for the .NET platform and created the best tools for the developer and designer communities. Rudder also served as vice president of Technical Strategy working directly with Microsoft Chairman Bill Gates on the company’s technical planning. This is a win for Microsoft and for Rudder.

Tami Reller will lead all marketing with the field relationship as is today. Mark Penn, corporate vice president of strategic and special projects, will take a broad view of marketing strategy and will lead with Tami the newly centralized advertising and media functions. Tami Reller is executive vice president of Microsoft’s Marketing group, responsible for marketing to consumers and businesses globally. Since joining Microsoft in 2007, Reller has held several positions within the company. Most recently, she was both chief marketing officer and chief financial officer for the Windows division.

Kevin Turner retains his role as COO, leading Microsoft’s worldwide sales, field marketing, services, support, and stores as well as IT, licensing and commercial operations. As Microsoft’s chief operating officer, Kevin Turner leads the company’s global sales, marketing and services organization of more than 47,000 employees in more than 190 countries. Under his leadership, the sales and marketing group delivered more than $77 billion in revenue in fiscal 2012. In his eight years as chief operating officer, Turner has driven a strong track record of results, execution excellence and improved efficiency while also driving the customer satisfaction scores to the highest in company history. Turner spent nearly 20 years at Walmart, where he rose through the ranks and was named the youngest corporate officer ever at Walmart at age 29. He is known for his fire and brimstone sermon-like speeches to Microsoft’s partners to incite them to go out and sell, sell, sell. Word has it that in this reorg Turner loses a bit of his marketing function to others. His plate is big enough that he can afford to share a little, but will he like it?

Tony Bates will focus on key partnerships especially Microsoft’s innovation partners—OEMs, silicon vendors, key developers, Yahoo, Nokia, etc., Ballmer said. He also will focus on the company’s broad work on evangelism and developer outreach. Developer and Platform Evangelism, corporate strategy and the business development efforts formerly in the business groups will become part of this new group. OEM will remain in Sales, Marketing and Services Group (SMSG) with Kevin Turner with a dotted line to Tony who will work closely with Nick Parker on key OEM relationships. Tony Bates is executive vice president of Microsoft’s Business Development and Evangelism group, responsible for the company’s relationships with key OEMs, strategic innovation partners, independent software vendors and developers. He also leads Microsoft’s corporate strategy team. Before leading the Business Development and Evangelism group, Tony was the president of Microsoft’s Skype Division and the CEO of Skype prior to its acquisition in October of 2011. This is a big win for Bates as he gets a little piece of everybody’s pie. He also has a solid, reinvigorated DPE group led by the go-get-em Steve “Googs” Guggenheimer.

Amy Hood will centralize all product group finance organizations. SMSG finance, which is geographically diffuse, will report to Kevin Turner with a dotted line to Amy. As chief financial officer, Amy Hood is responsible for leading Microsoft’s worldwide finance organization, including acquisitions, treasury activities, tax planning, accounting and reporting, and internal audit and investor relations. Prior to this role, Hood was chief financial officer of Microsoft’s Business Division, responsible for the company’s productivity applications and services, including Microsoft Office 365, Office, SharePoint, Exchange, Dynamics ERP and Dynamics CRM.

Brad Smith will continue as general counsel with responsibility for the company’s legal and corporate affairs and will map his team to the new organization. Brad Smith is Microsoft’s general counsel and executive vice president, Legal and Corporate Affairs. He leads the company’s Legal and Corporate Affairs Group, which has approximately 1,100 employees in 55 countries, and is responsible for the company’s legal work, its intellectual property portfolio and patent licensing business, and its government affairs, public policy and corporate citizenship and philanthropic work. He also serves as Microsoft’s corporate secretary and its chief compliance officer. He joined Microsoft in 1993 and became general counsel in 2002. Smith’s good for Microsoft and a cool dude, but nowhere near as cool as his bow-tie-wearing predecessor, Bill Neukom, as in “nuke ’em” to all Microsoft’s foes and haters.

Lisa Brummel will lead human resources and map her team to the new organization. Lisa Brummel is executive vice president of human resources at Microsoft and has led HR at the company since May 2005. Brummel joined Microsoft straight from the university in 1989. Since then, she’s held a number of management and marketing positions across Microsoft’s consumer, hardware and productivity businesses.

Kurt DelBene served as president of Microsoft’s Office Division. Of DelBene, Ballmer said: “Kurt DelBene will be retiring from Microsoft. Kurt has been a huge part of our success in evolving Office to be a great cloud service, and is a key member of my leadership team. I can’t express enough gratitude for the work he’s done for the company, and I will truly miss him. Kurt is a truly amazing leader and a special person. His contributions to Microsoft over 20-plus years can inspire us all.”

Ballmer said, “Craig Mundie will be stepping off the senior leadership team to devote 100 percent of his time to a special project for me through the end of this calendar year. Beginning in 2014, Craig will continue as a consultant through his previously agreed upon departure date at the end of calendar 2014.” Mundie has been a senior advisor to the CEO of Microsoft, reporting directly to Steve Ballmer. In this role, he has worked on key strategic projects within the company, as well as with government and business leaders around the world on technology strategy, policy and regulation. Mundie served as Microsoft’s chief research and strategy officer, where he oversaw Microsoft Research. Mundie has also served as Microsoft’s chief technical officer for advanced strategies and policy, working with Microsoft Chairman Bill Gates to develop the company’s global strategies around technical, business and policy issues.

Ballmer said, “Rick Rashid will step away from running Microsoft Research and move into a new role driving core OS innovation in our operating systems group. Rick created MSR, the most amazing computer science research institution in the world. We owe him so much for that. He has a great team to assume the mantle, and it is exciting to have Rick return to his roots in OS to help propel us forward.” After joining Microsoft in September 1991, Rashid served as director and vice president of the Microsoft Research division and was promoted to chief research officer in 2000. In his earlier roles, Rashid led research efforts on operating systems, networking and multiprocessors, and authored patents in such areas as data compression, networking and operating systems. Before joining Microsoft, Rashid was professor of computer science at Carnegie Mellon University. Microsoft Research is in good hands, but having Rashid return to his OS roots to advance the operating system could be huge for Microsoft. Big win.