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Microsoft Rejigs Whole Organization; Boosts Ray Ozzie, Developers, MSN to Forefront

Seven Divisions Turn into Three: Windows, Office, and Games

Calling it "an alignment for future innovation and growth," Microsoft has announced a long-anticipated reorganization – including strengthening the role of CTO Ray Ozzie (pictured) – intended to enable the company to compete more effectively with Google and Yahoo!, which have taken the lead in the world of Internet search and usage and which thereby threaten Redmond's long dominance on the desktop and within certain parts of enterprise IT.

Microsoft's previous seven divisions have been simplified into a three-divisions structure: The Microsoft Platform Products & Services Division will be led by Kevin Johnson and Jim Allchin as co-presidents; Jeff Raikes has been named president of the Microsoft Business Division; and Robbie Bach has been named as president of Microsoft Entertainment & Devices Division.

In addition, the company said Ray Ozzie will expand his role as chief technical officer by assuming responsibility for helping drive its software-based services strategy and execution across all three divisions.

“These changes are designed to align our Business Groups in a way that will enhance decision-making and speed of execution, as well as help us continue to deliver the types of products and services our customers want most,” said Steve Ballmer, chief executive officer at Microsoft. “It’s great to have extremely successful broad leaders with strong track records in driving growth and innovation leading these three very important areas for the company. We see a new era of opportunity to provide greater value to our customers by weaving both software and services into forms that suit their needs. By bringing together the software experience and the service experience, we will better address the changing needs of our customers’ digital lifestyles and the new world of work.”

Patform Products and Services Division
Johnson will succeed Allchin, and the two will serve as co-presidents until Allchin's retirement next year. The new division’s mission "is to enable exciting user experiences and drive customer value through continued innovation in the software platform and software services delivered over the Internet," Microsoft says. Its primary focus will be Windows and related issues with respect to enterprise IT.

Business Division
The Information Worker business and Microsoft Business Solutions (MBS) will combine to form the Microsoft Business Division, with Doug Burgum, senior vice president, reporting to Raikes. This division will deliver software and software-based services "that enable organizations to succeed in today’s constantly evolving workplace by amplifying the impact of their people," according to Microsoft. Office will forms the core product for this group.

Entertainment & Devices Division
The new Microsoft Entertainment & Devices Divisionthe current Home and Entertainment Division with the current Mobile and Embedded Devices Division and will "consolidate Microsoft’s industry engagement around devices to deliver even richer and more relevant scenarios for individuals at work, at home and when they’re mobile," the company said. The XBox has been a tremendous breakthrough product for the company, particularly among young users, and the company hopes to grow this division to "bring more focus to the company’s efforts in entertainment and related devices and services." The senior vice president of Microsoft’s Mobile and Embedded Devices Division, Pieter Knook, will report to Bach.


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