So Microsoft did the thing companies do when they cant figure out what else to do: they reorganized. Thursday, Ballmer sent out this memo called "One Microsoft" and it's been making the rounds since. The gist is they're blowing up the old structure, the one where Windows and Windows Phone and Xbox and Office all basically ran as their own little kingdoms with their own P&Ls, and replacing it with four functional groups instead: Operating Systems Engineering, Devices and Studios, Applications and Services, and Cloud and Enterprise. Julie Larson-Green gets devices and studios. Terry Myerson gets the OS group. Qi Lu keeps apps and services. Satya Nadella gets cloud and enterprise, which if you squint is probably the most important seat in the new arrangement even though nobody's saying that out loud yet.
I've read the memo twice now and I keep having the same reaction, which is: I have sat through three of these at three different jobs and they all read exactly like this one. Theres always a line about "one company" or "one team" or some version of that, theres always a promise that silos are going away, and theres always a new org chart that looks suspiciously like the old org chart wearing a different hat. Doesnt mean it's wrong to do, necessarily. Sometimes the boxes really do need moving. But Ive learned not to get excited about the announcement itself, because the announcement is the easy part. The hard part is whether the actual day to day incentives change, whether a PM on the Windows team stops treating a PM on the Office team like a rival for budget, and that stuff doesnt show up in a memo, it shows up eighteen months later or it doesnt show up at all.
What's actually interesting to me isnt the reorg itself, its the framing. Microsoft has spent the better part of a decade being described, correctly, as a company organized around Windows first and everything else second. Xbox lived or died on its own. Bing was its own weird island that bled money quietly in a corner. The reorg is explicitly trying to kill that, to make "devices and services" the actual identity of the company instead of a slide in a keynote. Thats a real shift on paper. Whether it's a real shift in practice is a different question, and Im skeptical mostly because of scale. This is not a 200 person startup deciding to flatten its hierarchy over a long weekend. This is something like 100,000 employees getting reshuffled into new reporting lines, and any org that size has enough inertia that a memo, even one signed by the CEO, is more of a suggestion than a law.
Small aside because I cant help myself: Ballmer memos have a very specific tone that I actually kind of enjoy, in the way you enjoy a movie you know is bad. Theres always at least one sentence that sounds like it was written by a motivational poster having a stroke. This one has a bit about how the company will act "as one" with "shared goals," which, sure, fine, but Ive never once read a corporate memo that said the opposite. Nobody sends out a memo that says "going forward we will continue acting as several unrelated companies wearing a trenchcoat." It's always unity, always synergy, and it's always vague enough that you cant really argue with it, which is sort of the point I guess.
The timing is what makes me raise an eyebrow more than the content does. Windows 8 hasnt exactly set the world on fire, Surface RT inventory got written down by close to a billion dollars back in the spring, and the whole company is visibly trying to figure out what it looks like in a world where PCs arent the center of gravity anymore. A reorg is a very natural thing to reach for when a company is under that kind of pressure, because it's something a CEO can actually do this quarter, versus fixing a five year product strategy problem, which takes years and might not even be fixable by org chart. I dont think this reorg is nothing. I just think its going to take a couple of product cycles before anyone outside Redmond can tell if the boxes moving around actually changed anything that ships.