Microsoft's Silicon Valley-style shakeup

The software giant's snake-hipped boss plans to make the company dance to a different tune. Will this help it compete with its California-based rivals?

by Emma Haslett
Last Updated: 03 Sep 2013
Has Steve Ballmer dealt the final blow to Microsoft’s ‘software is king’ model? The Seattle-based company’s chief executive has announced plans to shake up its organisational structure, essentially dividing up departments to make it more like its Silicon Valley rivals, and less like a 20th century manufacturer. (or it could just be an attempt to distract attention from who had access to what under the US government’s Prism programme – you decide…).

In a 2,000-word memo headed ‘One Microsoft’ (no, MT is not raising an eyebrow), Ballmer outlined the details of the shakeup, which will essentially see departments organised ‘by function’.

‘Engineering (including supply chain and datacenters), marketing, business development and evangelism, advanced strategy and research, finance, HR, legal and COO (including field, support, commercial operations and IT). Each discipline will help drive our overall strategy,’ he said.

Admittedly, MT isn’t entirely sure it knows what a ‘business development and evangelism’ department (or, indeed, COO department) does, but the move is nevertheless much-needed.

It means, for example, that engineers working on operating systems for products from PCs to the Xbox will all work together, rather than in separate teams as they had before – a structure which had been blamed by some former executives as preventing Microsoft from applying new innovations across its structure.

The trouble is, the original structure of ‘autonomous divisions’ – inspired, apparently, by 20th century American megafirms like General Electric – was only imposed by Ballmer in 2005. But with aforementioned executives complaining it was old-fashioned, with any luck Ballmer has got to the heart of Microsoft’s issues.

The shake-up won’t all happen at once – it’ll be introduced ‘through the end of the calendar year as we figure things out’. He also pointed out that while Microsoft’s core values won’t change, ‘how we express them and act day to day must evolve’.

Perhaps to signal his intentions, Balmer signed off the memo in typically Silicon Valley style: ‘Let’s go. Steve’.


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