Microsoft Reorg Finally Combines Zune and Xbox, but What About Windows Mobile?

Microsoft last week quietly made some organizational changes to its Entertainment and Devices (E&D) business unit, which is responsible for such lackluster performers as Windows Mobile, Windows Media Center, Zune, and MediaRoom, as well as the Xbox 360. This reorg isn't terribly dramatic, but it does position the software giant to consolidate its consumer-oriented online services, as previously promised.

Before this past week, Microsoft maintained an Interactive Entertainment Business group within the E&D unit that focused on the Xbox and Windows gaming product lines. And there was a TV, video, and music group that focused on Windows Media Center, Zune, and MediaRoom.

Also, Microsoft has created a new E&D services infrastructure team that will work with the Interactive Entertainment Business group and the TV, video, and music group. The goal is to fulfill Microsoft's long-standing promise to consolidate the media and other content that is made available via now-disparate services such as Zune Marketplace, Xbox Live Marketplace, and, to a lesser degree, Games for Windows Live and other PC-based services. So, this isn't so much Microsoft "moving faster than previously expected," as one news outlet proclaimed, as it is the software giant slowly catching up with promises it made long ago.

Only the Interactive Entertainment Business group survives the reorg. Now, Microsoft's in-house digital media products (i.e., Media Center and Zune) have been moved into that group, while MediaRoom will form the basis for a standalone business group. So the TV, video, and music group is no more. Not surprisingly, the person previously in charge of that now-disbanded group, Enrique Rodriguez, is "evaluating his next career opportunity," Microsoft says. My understanding is that he's left Microsoft entirely.

One naturally wonders how this change affects Windows Mobile, given the software giant's quiet but important progress toward a next-generation version, Windows Mobile 7. Some believe that Windows Mobile will be moved out of E&D and into the wider Windows Division at Microsoft. My take is that such a move can't happen quickly enough: The mainstream future of computing will occur on non-PC devices and run on software like Windows Mobile. If Microsoft is serious about making Windows Mobile successful, it needs to get it away from the people responsible for its disastrous showing in the face of competition from Apple, Google, and others.

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