
Microsoft Shakes Up Its Leadership and Internal Structure - rbanffy
http://techcrunch.com/2015/06/17/microsoft-shakes-up-its-leadership-and-internal-structure-as-its-fiscal-year-comes-to-a-close/
======
Roritharr
As per my comment on the Stephen Elop Thread:

Ex Microsoft Manager went to Nokia, destroyed its Market Value, sold the
debris back to Microsoft is now leaving Microsoft again. Time to short
whatever company he is going to next. ;)

~~~
hbharadwaj
As an ex-management consultant, I don't see any other plays that were possible
for Elop. I am going off of the Bloomberg article for some conclusions. He is
vilified simply because he became the last CEO of a beloved empire which was
already gasping for it's last breaths. His plays were the right plays from a
Business Perspective. But at that point, it was already too late and
Apple/Google had already conquered the market. The only viable option would
have been to re-invent the cell phone.

1\. Nokia had a Maps business. Obviously, Elop wanted to see it on the chosen
platform. 2\. Nokia had a host of apps that they wanted to see on the chosen
platform. 3\. Google refused to allow modifications to their MADA. 4\.
Meego/Maemo were not viable/not ready. 5\. Microsoft's offer came with an
infusion of cash.

(Bloomberg article:
[http://www.bloomberg.com/bw/magazine/content/11_24/b42320567...](http://www.bloomberg.com/bw/magazine/content/11_24/b4232056703101.htm))

~~~
sangnoir
> He is vilified simply because he became the last CEO of a beloved empire
> which was already gasping for it's last breaths

That's being overly generous to Elop. The 'Burning Platform' memo was by his
own volition and it played a big part in the decline. This essay nails what
Elop did wrong[1] (a bit over-the-top though). Namely, he called his own
product crap, and when he distributed the memo, Nokia had _no solution_ ready
- they were waiting on Microsoft (Osborne effect). "Hey guys, our phones are
currently crap. That Maemo phone you're about to buy - we're discontinuing it.
We will have awesome ones sometime in the future though. Remember to by a
Nokia ;-)".

1\. [http://communities-
dominate.blogs.com/brands/2011/08/coining...](http://communities-
dominate.blogs.com/brands/2011/08/coining-term-elop-effect-when-you-combine-
osborne-effect-and-ratner-effect.html)

~~~
snowwrestler
> The 'Burning Platform' memo was by his own volition and it played a big part
> in the decline.

He wrote the memo but the question is to what extent it simply described the
situation as it actually existed. If he had never written that memo, would
Nokia be a competitive mobile platform ecosystem today? I find that hard to
believe. I don't think it's realistic to blame so much on a few hundred words.

~~~
sangnoir
By describing 'the situation as it actually existed', he did a massive
disservice to the company he helmed. I am not saying it was _the_ reason Nokia
failed, only that it was a huge contributing factor.

You do not expect a company CEO to do negative PR - he damaged Nokia's brand
and greatly harmed the confidence developers/consumers had in Nokia.

> I don't think it's realistic to blame so much on a few hundred words.

From the article I previously linked: _" Gerald Ratner[1] was CEO of British
jewelry group Ratners (since renamed Signet Group). He made a famous speech in
London to the Institute of Directors in 1991 in which he said his company
products were sold for such low prices "because its total crap." This remark
was then published and caused his company to collapse and was only saved by
his departure - and the rebranding of the company to Signet."_

Ratner destroyed his company in 43 words (relevant part of speech is on
Wikipedia).

[http://en.wikipedia.org/wiki/Gerald_Ratner](http://en.wikipedia.org/wiki/Gerald_Ratner)

------
sdar
Takeaways and what I'll watch for:

Kirill failed to cloudify. Qi isn't interested in the Dynamics business.
Benioff couldn't get on-boarded. Guthrie is happy to step in.

* Azure can improve with Dynamics. Can Dynamics business improve with Guthrie? * Will cloud revenue reporting get more "obfuscated" in quarters to come?

Terry's and Elop's orgs were a) building cohesive/unified experiences and b)
fighting conspiring threats to their long-term business solvency.
Consolidation chose the most prominent leader.

* Does the bench of Terry's replacements change? * Could it be the first step towards scaling down hardware and devices?

------
smithkl42
Interesting to see that Scott Guthrie is now getting talked about in the same
breath as the MS senior management. His career is on a tear. Hopefully he can
continue to help with the turnaround.

~~~
mhomde
Ugh, I sure hope Scott doesn't become an example of the Peter Principle. He
strikes me as a very knowledgeable nice guy that wouldn't fare well in
management

~~~
qq66
Scott Guthrie is one of those unicorns who is both highly knowledgeable, very
nice personally, and a great manager (I'm not sure why you suggest that he
wouldn't fare well in management, but he is already running Azure). I remember
a Azure demo day that he led at NEA where he opened a console, created a git
repo, wrote a hello world, and deployed it to Azure in ~60 seconds.

------
VieElm
Microsoft is separating applications and Windows. Is that a new thing? Does
this mean Outlook and Office are no longer part of the same internal
organizational structures when they used to be? I think if this is true and a
new development that's going to be very good for Microsoft. I feel like
Windows, while still a great workhorse OS has been like a anchor weighing
Microsoft applications down on other platforms.

~~~
amogrr
Outlook and Office are part of the Applications and Services Group. Windows
was the Operating Systems Group. It's been this way since 2013

~~~
WalterGR
Were Windows and Office _ever_ part of the same org? I don't believe so - at
least in this century. In fact, my understanding is that the antitrust consent
decree required a separation between the OS and applications orgs.

~~~
VOYD
Didn't Sinofsky go to Windows, after his rein in Office?

~~~
ryanburk
yes, but he didn't bring office with him to windows.

------
Animats
Bing isn't even mentioned.

There used to be a CEO of Bing (Qu Lu and Nadella had been in that slot) but
last year, Bing was split up under 5 VPs; there's no longer a real Bing
organization.

It's strange. Bing has 20% market search share under its own name, plus 13%
under the Yahoo brand. That's 33%. Google has 64%, so Bing is now more than
half the size of Google in terms of searches. That's OK market share; it's
like being Chrysler vs General Motors.

Bing's profits, though, are awful. Microsoft apparently loses money on
Bing.[1] It's hard to tell from the way Microsoft reports online services.
Google's advertising revenue is 18 times Microsoft's. That's Bing's problem.
Nobody buys Bing ads. It's surprising, with the the market share, that Bing
can't fix this.

[1] [https://www.ventureharbour.com/visualising-size-google-
bing-...](https://www.ventureharbour.com/visualising-size-google-bing-yahoo/)

~~~
antics
I am employed at MSFT. This post (currently the top post) is factually
incorrect on basically every level, both on subjects that look good for the
company, and on subjects that don't. I'm stepping in to correct this because
it's better that people understand honestly where we are and aren't doing
well, then it is to have ridiculous rumors spread by people who shouldn't talk
about what they don't understand.

Bing is under Qi Lu, full stop. Lu is very senior VP who reports directly to
Satya Nadella. Bing is NOT split among Qi and 4 of his VP peers. It IS true
that Lu has split the responsibilities of managing Bing up among SOME of his
direct reports, almost all of whom are themselves VPs. But the idea that there
is no real "Bing org" anymore is just completely and totally wrong. They all
answer to Lu, and they've split responsibilities along sensible boundaries, so
that things like UX are under one VP and infrastructure is under another VP.

Second, Bing does not have 20% market share "plus" Yahoo's market share. Bing
_and MSFT properties like MSN_ have 20% market share. Yahoo has 12%. You can't
just credit Bing with Yahoo's market share. That's a search experience they
work hard on, and the fact that Bing powers Yahoo is largely immaterial to
their consumers, who come to Yahoo for the _Yahoo experience_. They could
switch to Google tomorrow and the vast majority of consumers would not notice
or care. Truthfully, the biggest (and arguably only real) benefit for Bing is
the increased ad revenue.

Third, Bing IS profitable. This is well-known and reported on.

Fourth, it is basically completely untrue that "nobody" buys Bing ads.
Obviously it would not be profitable if that were true. Furthermore, the
supposition that you should buy ads based on market share of the search engine
is _hilariously_ wrong. You should purchase ads on the platform where they
will be more successful. A lot of times this is Google; sometimes this is
Bing. The fact that the parent got this wrong basically indicates that they
are not to be trusted on this subject, at all. If the poster doesn't know what
they're talking about here, it's better to just stop talking then it is to
provide information that is wrong or harmful to people listening in.

~~~
jbhatab
When is bing the right choice and google the right choice? I figure with their
market shares that it would be pretty normalized. Just curious why there's a
big difference between the two search engines in terms of users.

~~~
reilly3000
I run lots of PPC for lots of clients, and Bing is very relevant. Their UI has
been painful, and the quantity of their search traffic varies wildly compared
to Google, but it is also much cheaper.

Bing traffic by and large tends to be older, more affluent, and less tech
literate... people who don't tend to change their default search engine. For
many types of businesses, this is ideal. Also we have had good results in tech
B2B marketing with Bing. My theory is that most MS sysadmins don't want to run
chrome on their servers but surf from their boxes and get lazy. Also porn.

The big story with Bing is its tight integration with Windows, XBox, Cortana,
etc. Their research direction per Stefan Weitz has been to focus on making
natural language search really work. Less effort has been invested in trying
to keep up with Google and more has been trying to create a different search
experience.

When Cortana really hits the main stage this summer/fall, we'll be seeing the
manifestation of Bing at its fullest, and if they really get the Neural
Networks nailed they could pull off a big shift in how people search, and also
how people advertise...

[http://blogs.windows.com/bloggingwindows/2015/04/30/cortana-...](http://blogs.windows.com/bloggingwindows/2015/04/30/cortana-
makes-friends-with-your-favorite-apps/)

~~~
iribe
This coincides with my theory explaining why bing is bigger in the US and not
Europe. European regulators forced microsoft to make it easy to switch search
engines/browsers, and users when given the choice tend to choose google. That
means bing is successful due to being a microsoft product forced upon its
users.

------
fredkbloggs
It's standard practice at any large company to make org changes at least once
a year, and is considered mandatory at any that's "struggling"; i.e., not
growing, losing money, and/or flopping with high-profile new products or
acquisitions. It doesn't necessarily reflect any real change in product mix,
day-to-day life for the rank and file, or any high-minded view of how the
company ought to be run. It's just what CEOs do to demonstrate that they're
"doing something" so they can keep their highly lucrative jobs a while longer.
The departure of Elop was expected and is also standard for CEOs of acquired
companies at some point from a few months to a few years after the deal
closes. So all in all, nothing to see here.

~~~
zorbadgreek
The size and scope of these changes are atypical for Microsoft, especially
given the number of senior executive departures.

------
njloof
> I don’t think that Microsoft is shedding its most popular executives.

And perhaps some "ding, dong, the witch is dead" from Redmond over those that
are departing?

------
deciplex
Who was responsible for the Windows 10 nag that appeared in my system tray a
few weeks back? Have they been sacked?

------
q2
It seems, new Microsoft is sharply focused on consumer part (aimed at Apple
and Google) and enterprise part(aimed at Amazon cloud and others). Article
conveys the same.

I won't be surprised if bing is handed over to yahoo completely.

~~~
jacquesm
> I won't be surprised if bing is handed over to yahoo completely.

I would be very surprised. As would all those MS employees working on Bing, it
would be unprecedented for a company to hand a fully functional and somewhat
critical leg of the company to a competitor.

------
edwinnathaniel
Dynamics CRM approaching $2B and the Head is cut... :(

~~~
bernadus_edwin
Need new head to compete with oracle and salesforce

~~~
bottombutton
SAP too. Even newer, cloud-based companies like Workday are looking like very
promising contenders for the same small/midsize businesses as AX, GP, NAV, and
SL.

------
pjmlp
Can we please have .NET, C++ and Windows on the same unit to avoid the usual
issues among them (e.g. Longhorn)?

~~~
WalterGR
I don't remember the Longhorn problems being due to any friction between the
developer division and the Windows org.

Rather, mostly Microsoft bit off more than it could chew, and somewhat the
perf of .NET on the average machine of the day wasn't up to snuff. If I recall
correctly, there were also issues with managed-native interop that really
threw a wrench into the works when developing the new (.NET-based) shell.

EDIT: There could also have been issues due to the antitrust consent decree -
but that's speculation - I don't remember the details of the decree. If that
is the case, then parent comment could be correct.

~~~
pjmlp
Many of those performance issues were political and not technical.

Hence why the going native when the windows team won the redesign to Vista.

Everything that the .NET team has been doing in the last years in terms of
compiling directly to native code via MDIL to Windows Phone 8 and now .NET
Native, it is a consequence of that.

The ideas behind Longhorn could have been achieved if .NET followed the same
compilation model as Ada, Delphi, Modula-2, Modula-3, Oberon or any other
memory safe language with compilation straight to native code.

This is how I see it by reading between the lines from all those MSDN
articles, Channel 9 videos and occasional forum posts.

I might be wrong, but that is how I see it.

~~~
ams6110
So the main reason Longhorn didn't come to fruition was performance? (Honest
question, no sarcasm implied).

~~~
WalterGR
The main reason is that Microsoft wasn't on track to ship the OS with its
grand vision (the "Pillars of Longhorn," which included e.g. WinFS) in any
reasonable amount of time.

For example, it wasn't the case that Longhorn was code complete and the Powers
that Be said, "You know, the perf isn't where we'd like it, so time to reset."
Or that the only work that was happening was perf work.

There were just too many parts to the grand vision of Longhorn, and hence too
many moving pieces, and it just never solidified.

IIRC, around the time of the reset, bugs were being opened at a faster rate
than they were being closed. So not only was Longhorn not going to be ship-
ready in any reasonable amount of time, at that rate _it was never going to be
ship-ready at all_.

~~~
MichaelGG
At PDC 2003, they also stated they were expecting much faster processors - one
slide mentioned 6GHz chips.

~~~
WalterGR
Really interesting.

Mid-2003 is when I started at Microsoft. Though: out in MSN, not where the
action was. :)

Has Moore's Law really broken down that severely 'lately'? I'm reminded of one
of Kurzweil's books that shows 'Moore's Law' holding since before digital
computers. But - the book shows - zoomed in, the trend line is actually a
succession of periods of fairly rapid growth followed by stagnation.
(Obviously though one question is how cherry-picked the underlying data
was...)

Edit: The book was _The Singularity is Near_.

~~~
MichaelGG
Transistors have kept getting cheaper, but single core perf hasn't been
growing as fast for the last decade or so.

------
notNow
The "Great Purge" by Nadella to get rid of all of Balmer era old guards so
Nadella & Co can reign supreme in Microsoft.

~~~
outside1234
This is more like the idiot purge. These execs are well known for being the
worst of the lot inside Microsoft.

Frankly, Eric Rudder should promptly write a book about how to maintain a VP
position at a bigcorp without actually doing anything for a decade.

