Drumbeat about Microsoft reorg grows louder

A report by the Wall Street Journal says Steve Ballmer may announce a restructuring on Thursday

By , IDG News Service |  Software

According to AllThingsD's report on Monday, the reorganization will be drastic and has many company leaders on pins and needles because Ballmer has apparently kept the details confidential, sharing them with only a select few. According to a Fast Company article, the restructuring intrigue and uncertainty played a part in Don Mattrick's decision to leave his job as president of the company's Interactive Entertainment unit and join Zynga as CEO.

But the overall goal, according to AllThingsD, is to bring "functional coherence" to the company and group some products under different leaders, including the creation of a new unit for cloud computing and business products led by Satya Nadella, who is now in charge of the Servers and Tools division. Qi Lu, now head of Online Services, which includes Bing, would also oversee Office and other apps. A Bloomberg article last week also included details on a number of such moves that are reportedly part of the plan.

Of course, major restructurings and reorganizations are common among large IT vendors, and often the plans end up being so convoluted and hard to implement that they do more damage than good. Sometimes the plans slow down the company or simply prove outright unwise, leading down a path of failure.

An unwanted byproduct can always be that enterprise customers and employees interpret these shakeups as signs that the vendor is in crisis and rudderless, leading them to lose confidence in the companies. Customers then begin to second-guess their decisions to invest in the vendor's products, while employee morale dips and staff turnover increases.

Rumors about the restructuring plan began floating around weeks ago. Microsoft will report its fourth quarter earnings on Thursday of next week.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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