Ballmer announced Microsoft's restructuring plan on July 12

After a series of rumors, Microsoft CEO Ballmer (Steve Ballmer) finally announced Microsoft's restructuring plan on July 12. The plan, designed to improve Microsoft's flexibility and responsiveness, has redefined the rights of Microsoft's top brass, but it is still unclear whether Microsoft will be able to crack down on the deep crisis in the mobile era.

Reorganization plan

In the past two weeks, the news of Microsoft's imminent mass reorganization has been abuzz. Finally, on July 12, Mr. Ballmer personally announced the planned restructuring. If you have time to look at Ballmer's lengthy internal memo to employees, this is definitely the biggest restructuring plan in Microsoft's history.

According to the latest restructuring plan, Microsoft has reduced its 8 business units to 4 departments: Operating system, application and service, cloud computing and enterprise, and equipment and studio departments.

Specifically, the operating system department was responsible for Terry Myerson, the former Windows Phone engineering development director, which Trie Meiersen software for all of Microsoft's major operating systems, including Windows, Windows Phone, and the Xbox;

The new equipment and studio department head is the original Windows department responsible person Zhu Li Larsen-Green (Julie Larson-green), the department will include Xbox hardware, surface series of tablet products, hardware accessories and games and other business;

As the head of the new cloud computing and corporate sector, Seia Nadra Satya Nadella will be responsible for Microsoft's data Center network and online service business, as well as the Windows Azure cloud computing platform;

The application and services sector is led by Lurkey, the original Microsoft Online Services business executive, which includes applications and services in the fields of efficiency, communications, search, and other information categories, including Office, corporate social platform Yammer, Skype and Bing search.

Implement the "equipment and services" strategy

The restructuring of Microsoft has broken the old habit of dividing organizational structures according to specific business. In the case of Windows operating system business, this was an independent business unit, but in the latest plan, Microsoft integrates the Windows operating system business, Windows Phone operating system, and even the Xbox operating system. The next two operations, in fact, are divided into different departments before the reorganization.

As far as the operating system Department is concerned, the benefits of integration are that Microsoft can unify the distributed resources, unify the development of the operating system of hardware devices, and ensure the unification of the Microsoft series operating systems on a variety of devices. In fact, this is in line with the development trend of the industry as a whole. Prior to that, Google had already classified the Chrome OS and Android systems as a department, and earlier Apple had handed over iOS and Mac OS X to Apple's chief designer Ive Jony Ive.

From the results of the reorganization, Microsoft placed services and hardware in an important position, which is in line with Ballmer's commitment to shareholders. Ballmer disclosed his strategy in an open letter to shareholders last year. He wants to transform Microsoft from a diverse but relatively independent business group into a truly collaborative "equipment and services" company.

Today, in a memo titled "The same Microsoft," Mr. Ballmer stressed again Microsoft will develop a unified strategy from the corporate level, rather than various departments to implement their own strategy, and this reorganization will help Microsoft to better implement the strategy, so that the release to help users to engage in their most desired activities of the equipment and services, And the most valuable enterprise products and services to the enterprise.

Dangerous

While there is a good vision, it is unclear whether a simple architecture reorganization will help Microsoft develop the products that customers need most in a more timely fashion. Looking closely at Microsoft's current business environment, Microsoft is already in danger.

In Microsoft's best PC sector, the PC industry has fallen for 5 consecutive quarters as more consumers switch to smartphones and Tablet PCs. Overall PC shipments fell more than 10% in the second quarter of this year, according to the latest report by IDC and Gartner, a market-research firm. This is definitely not good news for Microsoft, which relies on an authorized operating system to gain excess profits.

In the corporate world, the rise of cloud computing has changed the way software services were delivered. Many enterprise users no longer buy stand-alone software packages and use online services instead. At the same time, the traditional server business is facing a huge challenge like the Amazon AWS Public cloud business.

Forrester Research, a market researcher, estimates that Amazon has a market share of 71% of corporate customers using cloud computing services, compared with about 20% of Microsoft's public cloud Windows Azure. With more than half of Microsoft's revenue in business, Microsoft has little leeway in this area.

Of course, the main reason why the world is looking down on Microsoft's future is that Microsoft has failed to catch up with the tide of the mobile era. The absence of market-wide mobile devices and services is a deep crisis for Microsoft.

Mobile devices are a revolution for PCs, although Microsoft hopes to launch products such as surface, which can hold the PC market and occupy a niche in the mobile device market. But from the market's reaction, this equipment sales are very general, the global market share of less than 2%.

Consumers now need cheap tablets and smartphones, and Microsoft's customary software-licensing model has pushed up Microsoft's cost of products, leading to the inability of mobile products with Windows and Windows Phone systems to dominate the market, Related applications and services ecosystems are also lagging far behind Apple and Google.

The deep crisis in Microsoft is that it still wants to use the business logic of the software age to make a difference in the mobile era, but market feedback is that this pattern is not feasible. Until Microsoft fails to make a substantial change, a mere reorganization of the organization may not fundamentally reverse Microsoft's plight.

Brent Thill, an investment bank analyst at UBS, said the restructuring would not have much impact in the short term, but that restructuring was necessary. "Microsoft needs to shake the tree." They must revolve around cloud computing and mobile restructuring, and this reorganization is the right step, but it will take some time. ”