Microsoft Announces Reorganization=20
REDMOND, Wash. -- March 29, 1999 -- Microsoft President Steve Ballmer=20
and CEO Bill Gates today announced a sweeping reorganization,=20
designed to refocus the company on the needs of customers.
The heart of the restructuring is the creation of distinct=20
customer-centered business groups:
* The Business and Enterprise Division, which will focus on the=20
information technology needs of large organizations.
* The Consumer Windows Division, which will focus on improving=20
Windows for the end user.
* The Business Productivity Group, which will focus on the=20
needs of the "knowledge worker" who is on the road and always in need=20
of his or her data.
* The Developer Group, which will focus on helping developers=20
who write software for all Microsoft platforms,
* The Consumer and Commerce Group, which will work to make it=20
easier for customer and businesses to get together online.
The business divisions will think and act in parallel, each driving=20
product planning and marketing strategies for customers. The=20
customer-focused parallelism represents a move away from the=20
alignment by products and technologies that Microsoft has used since=20
its founding.
"This new structure is part of the reinvention of Microsoft," said Ballmer.
Another part of that reinvention is a broadened new vision.
"Our original vision of 'a computer on every desk and in every home'=20
is still extremely relevant," said Gates. "Looking to the future our=20
vision is much more expansive. We see a world where people can use=20
any computing device to do whatever they want to do anytime,=20
anywhere. The PC will continue to have a central role in this future,=20
but it will be joined by an incredibly rich variety of digital=20
devices accessing the power of the Internet."
"We want to give people the power, connectivity and the ability to=20
choose how they want to use computing in their lives," Gates added.
Ballmer also announced the formation of a new Business Leadership=20
Team. This team will replace the Executive Committee formed in=20
December 1996, as the most senior-level decision-making team at the=20
company. Members of the team will include: Jim Allchin, Orlando=20
Ayala, Steve Ballmer, Brad Chase, Jon DeVaan, Bill Gates, Bob=20
Herbold, Laura Jennings, Joachim Kempin, Greg Maffei, Paul Maritz,=20
Mich Mathews, Bob Muglia, Bill Neukom and Jeff Raikes.
Gates and Ballmer Outline Blueprint to Reinvent Microsoft=20
Executives Announce Company Realignment to Better Focus on Customers,=20
Refresh Company Vision and Lay the Foundation for Meeting the=20
Challenges of the Future=20
REDMOND, Wash. - March 29, 1999 - Microsoft Corp. President Steve=20
Ballmer and Chairman and CEO Bill Gates today outlined a fundamental=20
realignment of the company designed to meet the needs of its=20
customers well into the next decade. The two executives outlined a=20
shift in its organizational structure to establish business divisions=20
based on the requirements of core customers. The business division=20
leaders will think and act in parallel, each empowered with driving=20
product planning and marketing strategies for their respective=20
customers. The customer-focused parallelism represents a move away=20
from the alignment by products and technologies that had served the=20
company since its inception.
"This new structure is part of the reinvention of Microsoft," said=20
Ballmer. "Software is going to play a far broader role in our lives=20
than we can even imagine today. When we took stock of our ability to=20
meet these future opportunities, it became clear that we were=20
organized to meet today's needs but not those of the next decade. We=20
realized that we needed to renew Microsoft by focusing on three core=20
issues: First, we needed to update and refresh our vision. Second, we=20
needed to get closer to our customers' needs and requirements. Third,=20
we needed to empower customer-focused groups to work more=20
autonomously and in parallel," added Ballmer.
"Our original vision of 'a computer on every desk and in every home'=20
is still extremely relevant," said Gates. "Looking to the future, our=20
vision is much more expansive. We see a world where people can use=20
any computing device to do whatever they want to do anytime,=20
anywhere. The PC will continue to have a central role in this future,=20
but it will be joined by an incredibly rich variety of digital=20
devices accessing the power of the Internet. We want to give people=20
the power, connectivity and ability to choose how they want to use=20
computing in their lives," Gates added.
Alignment for Greater Customer Focus, Execution of Priorities
Ballmer and Gates stressed that refreshing the Microsoft vision and=20
driving an organizational structure focused on customer needs would=20
help the company execute against its key priorities:
Making the Microsoft=AE Windows=AE 2000 operating system more scalable,=20
reliable and available, and continuing to deliver solutions that=20
simplify management and reduce total cost of ownership for this very=20
important IT platform
Improving information flow for the knowledge worker, including the=20
mobile worker, by providing end-to-end knowledge management solutions
Building an architecture that lets developers target a broad range of=20
devices and simplify development of second-generation Web applications
Bringing online consumers and businesses together by delivering the=20
best online experience for consumers, and by delivering an integrated=20
platform of products and services that will help businesses of all=20
sizes utilize the Internet as the ultimate marketplace
Developing a new generation of consumer-friendly PCs that are simple,=20
stable and so easy to use they will meet the needs of anyone in the=20
family
Ensuring power and connectivity for the explosion of new devices=20
emerging to complement the PC
The new structure more closely maps to Microsoft's core customers:=20
the IT manager, the knowledge worker, the developer and the consumer.=20
=46ollowing are the new business groups and their leaders:
Business and enterprise division. Jim Allchin, senior vice president.=20
Vice President Brian Valentine will lead development, which will=20
focus on software technology for the information technology customer.=20
Deborah Willingham will serve as vice president of marketing for this=20
division.
Consumer Windows division. Jim Allchin, senior vice president. David=20
Cole, vice president, will lead this division, which will focus on=20
evolving the Windows platform for the consumer.
Business productivity group. Bob Muglia, senior vice president. This=20
group will focus on meeting the needs of the knowledge worker. Rich=20
Tong will serve as vice president of marketing.
Developer group. Paul Maritz, group vice president. This group will=20
focus on the developer customer. Tod Nielson will head marketing for=20
this group.
Consumer and commerce group. Brad Chase, vice president, and Jon=20
DeVaan, vice president. This group will focus on bringing together=20
consumers and businesses online.
How the Structure Will Work
Leaders of these major business divisions will be empowered with=20
driving product planning and marketing for their respective=20
customers, allowing more focused and streamlined prioritization, goal=20
setting and accountability for each business division. While each=20
business division will manage its own internal functions in parallel,=20
members of the various groups will still partner across the company=20
where appropriate. For instance, the consumer and commerce group and=20
consumer Windows division can be expected to ally on marketing=20
programs. Certain core processes and infrastructure tools to ensure=20
marketing, management and engineering effectiveness will be shared=20
across group lines.
The company has also created the home and retail products division,=20
which will operate outside of the four core business divisions. It=20
will focus on consumer-targeted products such as games, input devices=20
and Microsoft's reference products. It will be headed by Vice=20
President Robbie Bach, reporting to Senior Vice President Orlando=20
Ayala. Vice President Steve Schiro and Vice President Rick Thompson=20
will partner with Bach on this business.
Business Leadership Team Replaces Executive Committee
Ballmer also announced the formation of a new business leadership=20
team, a subset of the executive staff who will meet with Gates and=20
Ballmer for a full day each month to ensure the company is on track=20
with its vision, planning and processes, and that cross-company=20
issues are elevated and resolved. This team will replace the=20
executive committee formed in December 1996 as the most senior-level=20
decision-making team at the company. Members of the team will include=20
Jim Allchin, Orlando Ayala, Steve Ballmer, Brad Chase, Jon DeVaan,=20
Bill Gates, Bob Herbold, Joachim Kempin, Greg Maffei, Paul Maritz,=20
Mich Mathews, Bob Muglia, Bill Neukom and Jeff Raikes.
In a related announcement, Microsoft made the following=20
organizational enhancements and promotions:
Greg Maffei, currently chief financial officer, gains the additional=20
title of senior vice president, finance and administration, and added=20
responsibility for the company's procurement and real estate.
Tod Nielsen, currently general manager, developer relations, becomes=20
vice president, developer marketing.
Mich Mathews, currently general manager of corporate public=20
relations, becomes vice president, public relations.
Nick MacPhee, currently general manager, corporate services, becomes=20
vice president, operations.
Bill Henningsgaard, currently general manager of corporate accounts,=20
becomes vice president, Western region and South Pacific.
Paul Gross, vice president, will be responsible for server software=20
products for the business productivity group.
John Connors, vice president, will run enterprise, education and=20
organization customer sales.
Moshe Lichtman, vice president, will drive business outside the=20
United States for the consumer and commerce group.
Rick Devenuti becomes vice president and chief information officer.