Amid skepticism, Microsoft's global business restructuring is finally coming out

Absrtact: Amid skepticism, Microsoft's global business restructuring was finally released, seen as one of the company's most significant restructurings in its history. After the reorganization, Microsoft includes four business units, namely operating system, application and service, cloud computing and enterprise, and hard

Amid skepticism, Microsoft's global restructuring was finally released, seen as one of the company's most significant restructurings in its history.

After the reorganization, Microsoft includes four business units, namely operating system, application and service, cloud computing and enterprise, and hardware business unit. Prior to the reorganization, Microsoft included eight business units, Windows business, service and business tools, Skype Business, Windows Phone, office, Interactive Entertainment, business solutions, and online services.

Why do you make this adjustment? Microsoft CEO Steve Ballmer group to employees of a letter called "a Microsoft" in an e-mail, said the plan will allow Microsoft in a rapidly changing world with faster speed, higher efficiency and greater ability to innovate.

Speed is the dream of Ballmer, because turn too slow, the PC era of the king Microsoft missed the Internet, mobile internet era, now is missing the "cloud Computing + data" era.

After this adjustment, Microsoft is basically upset again, but this is not the key, the key is that the power distribution of Microsoft has changed. In the past, Microsoft's eight business units have considerable power, including product development, marketing, promotion, partner development and so on. After the break-up, because of more cross-sectoral collaboration, the four departments now will no longer have these powers.

For example, the operating system department must collaborate with the hardware department, and the application and services sector must collaborate with the cloud computing and enterprise sectors. In order to better collaborate, the power of product development, marketing, promotion, partner development must be centralized at Microsoft headquarters, and the company resources should be centrally distributed by Microsoft Headquarter.

Ballmer also said: "We will integrate all products into a whole, rather than split into a group of ' islands ', our marketing, advertising and all customer interaction will reflect a company's strategy." ”

Mr Ballmer's reorganization is therefore known as a "paring" of the restructuring. In other words, Microsoft CEO Steve Ballmer mastered all parts of Microsoft, all products "life and Death", the division of power space is compressed.

Another result is that Mr. Ballmer transformed the original matrix management structure into a vertical management structure, reorganizing the original division of power into a centralized power system, and replacing the "Let's hear the cannon-making decision maker" with "the company that is deeply resident in the 帷幄."

As Ballmer had expected, the concentration of resources would make the company more responsive, but another negative result was that the decision chain was longer and the new phenomenon reacted more slowly to the market's products.

Why did Ballmer make this adjustment? A background of the reorganization of Microsoft is that now it innovation has been from "enterprise guiding innovation" into the "consumer market leading innovation" era, the matrix of decentralized division of business structure for the "Enterprise Market Guidance innovation" era.

In addition to Microsoft in the past, IBM, Oracle Enterprise Customer-oriented enterprises have adopted this framework.

But this structure is obviously outdated in the era of "consumer market leading innovation". The biggest winner of the consumer market-led innovation is Apple, which is the representative of the "centralization model", a company, a strategy, and the company's resources, determined by the CEO dictatorship, which determines the direction of product development, market layout, marketing strategies, and advertising.

The Apple architecture ultimately achieves the goal of "focus, perfection, innovation, and speed."

After this adjustment, Microsoft has improved the position of the hardware throughout the company: the hardware has become an independent department that will be responsible for all hardware development and the supply chain management of Microsoft's various devices, including surface, Xbox, removable devices, mouse, keyboard, gaming and entertainment business.

Under the new architecture, if Microsoft is exerting its hardware, all the resources of the company will fully support hardware development. Mr. Ballmer said last year that the goal of the reorganisation was to position Microsoft as a "device and service company".

Marketing consultant Company "great company" founder He Wanbin believes that Microsoft made this adjustment has a background, the IT industry in the first 20 years, "software kidnapping Hardware", the industry chain operating system manufacturer Microsoft has the most voice; after Apple's rise, the market trend is "hardware kidnapping software", that is, leading the innovation of hardware terminals, In order to gain the most discourse rights, grab the entire industry chain of the most profits.

The success of Apple is the envy of the living. Microsoft's reorganization, regardless of the direction of the business (consumer market hardware products), or centralized organizational structure, can be seen as a tribute to the dead jobs.

"But Mr Ballmer's reforms are not universally bullish. Innovation Factory founder Kai-Fu Lee said that the restructuring of Microsoft has seven major problems: restructuring impact on the speed of implementation; The stakes are too big to be pragmatic; Consistency "is not a user's demand;

Especially on the human level, Lee said, "Ballmer itself is an excellent single business manager and a super sales expert." However, he has performed poorly on the CEO level and has been underperforming in strategy and co-ordination. "This is another important aspect that worries about the eventual success of Microsoft's restructuring," he said.

Reorganization, Microsoft a long and difficult road. ”