Microsoft to split business into three

Microsoft to morph into three distinct business units

Winds of change continued to sweep through Microsoft as it announced plans last week to morph into three distinct business units.

Although the effect on the vendor’s channel was unclear, the software giant’s new divisions were announced only a week after it added training, upgrades and services to its Software Assurance programme, which received a mixed reaction from its channel (CRN, 19 September).

The three units are Platform Products and Services, a section covering Windows clients, server and tools; the Microsoft Business Division, including business applications, such as Office; and the Entertainment and Devices Division that spans mobile devices, the X-Box console and mobile devices.

The vendor said each division will have its own president reporting directly to Microsoft’s chief executive Steve Ballmer.

“These changes are designed to align our business groups in a way that will enhance decision-making and speed of execution, as well as help us continue to deliver the types of products and services our customers want most,” Ballmer said.

Ross Miller, managing director of Microsoft large account reseller Trustmarque Solutions, said: “As a partner I don’t think this will change things too much yet. It is a positive announcement and puts clear flags around its different business divisions.”

However, David Bradshaw, principal analyst at Ovum, was more sceptical about the benefits of Microsoft’s internal reorganisation.

“It will take more than moving around the company tree, switching the nameplates on a few doors and bringing more sales guys to the top table to make Microsoft more entrepreneurial,” he said.

Bradshaw added that the reorganisation was vital in order to starve off competition since the impact of rival vendors on Microsoft could have wider ranging effects than simply damaging turnover.

“Much of the technology sector now finds itself dependant on Microsoft. If it were to fall, many of us would be caught in the wreckage,” Bradshaw said.