Massive Microsoft Reorg Might Not Be Enough

Microsoft reorganizes its management ranks on a fairly regular basis, but most people outside the company are probably unaware of most of these changes, which typically involve shuffling product lines between divisions or moving around executives. But if reports this week are accurate, Microsoft is about to undergo an org-chart revision that will have much deeper ramifications than those of a typical reorg.

According to Bloomberg, Microsoft CEO Steve Ballmer is set to shake up his management team by adding senior executives with engineering backgrounds instead of business management skills. The idea is that Microsoft has a vision for the future but needs to execute more quickly. And to do so, it needs fewer managers and more engineers.

It's an interesting idea, but it also neatly highlights a concern that many observers have with Microsoft these days: Ballmer is himself a business manager and not a technologist or engineer. And perhaps an engineering-focused company such as Microsoft would be able to execute more efficiently with an engineer at the helm. Someone like, yes, Bill Gates.

Based on anonymous quotes from Microsoft employees, it's pretty clear that Ballmer hopes this shake-up will quell shareholder and board criticisms that the software giant has lost its competitive edge. And as readers of this column know, I've been complaining about Microsoft's inability to move quickly for years. For all its heady revenues from legacy products, the company is teetering on the edge of irrelevancy.

But like president Hosni Mubarak of Egypt, who is fighting his own more serious ouster, Ballmer's days may simply be numbered and we'll look back on these events as a last-ditch effort to stay in power. It's unclear how many markets Microsoft needs to cede to faster-moving competition before a serious change is made. But the past decade has seen Microsoft defeats in digital media and MP3 players, online search, smartphones, tablets, and even video games, where the Xbox 360, despite its strengthening sales, still came in third place last year and will likely be dead last among this generation of consoles.

At a time when even Microsoft's only truly successful consumer product is an also-ran, maybe it's time for a change. And this executive shake-up that Ballmer is allegedly planning might not go far enough.

TAGS: Windows 8
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