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Analysts say Microsofts decision to expand Chief Technology Officer Ray Ozzies role in developing the companys software-based services is a good move.
Ozzie will broaden his current role as CTO to assume responsibility for the development of software-based services across Microsofts newly formed core business divisions: Platforms and Services; Business; and Entertainment and Devices, as announced by Microsoft Corp. officials on Tuesday, in a statement.
Ozzie joined Microsoft in March with Redmonds acquisition of his company, Groove Networks Inc.
“Hes a perfect guy to do this, I always said Microsoft got a great deal when they invested in Groove,” said Robert Mahowald, program director for research firm IDC, in Framingham, Mass.
“Ray Ozzie has technical credibility and is an excellent guy to revamp Microsoft as they look at competing with companies like Citrix, Salesforce.com, and WebEx,” said Mahowald.
“He can help bring coherence for customers who want to look at Microsoft products in a way they can pay, for example, on a per-user basis.”
Mahowald said the overall reorganization seems to mirror Microsofts evolving business.
“Microsofts consumer business now accounts for 30 percent of its revenue.
It makes sense to have that element of its business with Xbox and Windows Mobile and other consumer pieces raised to the same level as Windows Server System and Office,” he said.
Other industry insiders agreed that Ozzies experience will bring strength to Microsofts services strategy.
“The thing about Groove was that it had a business model that embodied software-as-a-service, that was fundamental to the way the capabilities it provided were delivered. So I think he has a real understanding of not just collaboration and targeting the audience for Groove, but also the broader strategic issue of what is that business model exactly that allows Microsoft to make money off services,” said Mike Gilpin, vice president and research director, for Forrester Research Inc., in Cambridge, Mass.
Gilpin was not surprised to see Ozzie taking on a larger role in the company.
“I was at a financial analysts meeting in July in Redmond, and Microsoft traditionally has a session on that day when Gates speaks to the group. But I was surprised that it wasnt just Bill by himself, it was Bill and Ray talking and having a panel discussion.
“You could tell they had good chemistry, and that leads me to believe thats a factor behind this, that Bill really trusts Ray to invigorate Microsofts strategy, to move beyond the CTO role and to look at in this new purview of how can Microsoft more effectively compete with the likes of Google,” said Gilpin.