Microsoft Reorg 2013: The End of the Microsoft Office Division

By Jim Lundy

Microsoft announced its 2013 restructuring today and with it came a few departures, namely the President of the Microsoft Office Division,  Kurt DelBene. Very little mention was made of Kurt’s departure, except that Qu Liu, who ran Microsoft’s Search Business is now running the Applications and Services Engineering Group.

Putting aside that Delbene is out, the big news is that  Microsoft Office, one of the largest generators of Revenue for the company is no longer a Division at Microsoft. This blog post is about the Microsoft Reorg that was just announced and its impact on Microsoft Office. As more details emerge, we will be publishing a separate First Cut on this shift at Microsoft.

The End of the Microsoft Office Division

As announced by Microsoft, effective today, the former Microsoft Office division is now part of  the Applications and Services Engineering Group. It is clear that Balmer was not happy with the Office team, yet for all the apparent struggles with the shift to the Cloud, the Office Division has done better than just about any other group at Microsoft in transitioning from one release to another. In fact, having covered most of the releases of Microsoft Office going back nearly 15 years, nearly all new versions of Office offered backward compatibility. There were very few issues for users when they had to migrate to a new version.

The seeds of change at the Microsoft Office Division started in 2008, the year that Microsoft Office Executive Jeff Raikes announced his retirement after 27 years there. Jeff was a hands-on executive and he helped to make the Revenue Engine that it was. Now with DelBene out too, with the exception of SharePoint veteran Jeff Teper, little remains of the Executives that helped to grow the Microsoft Office Division.

Tony Bates is out and so is the Skype Division

On top of the Office Division, the newly created Skype Division has been collapsed as well. Tony Bates, the former Skype CEO is now doing business development and evangelism for Microsoft. The business development heads at the old Microsoft divisions will now report in to Tony’s new Business Unit (BU).

Is Microsoft acting like Apple?

While this may be seen as the attempt to have one Microsoft, to us, this reorganization starts to smell and look like an organization structure that is similar to how Apple runs things. However there is a major difference in the market focus. Apple has focused more on consumers, while Microsoft has grown mainly by catering to enterprises.  While Microsoft has been slow on the shift toward the Cloud, they have probably been slower on the shift to Tablets.

There more to talk about with regard to the Microsoft Reorg. Stay tuned for further analysis.