Apparently we weren't the only ones who found Microsoft's services strategy utterly confusing and slapdash -- Microsoft did too. To that end, as reported by All About Microsoft, they're splitting up their Platforms and Services unit into two different units as well as giving the previous president of that division a retirement to go work for Juniper networks.

The two new divisions will be “Windows/Windows Live” and “Online Services Business.” The W/WL will have three folks in charge and the OSB will get a new guy. Steve Ballmer sent out a letter to the company about the changes with some interesting tidbits about their feelings on Google, Apple, and Yahoo. Short version: We're working on search and Apple's done better with the “end-to-end” experience.

There's plenty to parse here, including the possibility of a Zune phone, so read on!

Zune Phone?

When Ballmer writes “We'll do the same with phones--providing choice as we work to create great end-to-end experiences,” it's likely to start up the rumor mill again with regard to that Zune phone he's repeatedly denied being interested in. Well, that and the fact that JKOnTheRun has it from an inside source that we'll see it based on Windows Mobile 7 (oh, btw, congrats guys!).

I'll stay neutral on the Zune Phone -- ok no I won't: I'm not opposed, but I'd prefer to see Zune features included in all Windows Mobile Phones, okay? I still like Microsoft's strategy of working with hardware partners to make Windows Mobile quite a bit, I just wish there'd be some more consistency (and hotness) across the different handsets. If Microsoft were to throw their own hat into the hardware market, I hope they can find a way to do it that doesn't undercut the entire ecosystem by introducing yet another non-standard Windows Mobile interface into the mix. So Microsoft: go ahead and make your Zune Phone, but offer the innovations therein to your partners, ok?


Back to the Windows Live branding debacle. I'd like to think that this new split is going to help things along. I'd like to think that, but I don't. Windows Mobile is precisely the sort of platform that needs to straddle the gap between traditional business space services that will fall under the “Online Services Business” and consumer-focused services that are part of “Windows Live.”

It's all very frustrating, because the truth of the matter is that Microsoft's offering is much better than anything anybody else has put out there except for RIM. There are some quirks and bugs with Windows Live on Windows Mobile, sure, but they're nothing compared to the Mobile Me mess right now. Toss in Live Mesh and Live Search and you have yourself an excellent suite of great online, cloud-based apps. That's not even counting what we see coming, consumer-wise, after the Danger acquisition.

In poker terms, Microsoft has a straight right now, they just haven't noticed yet because they can't seem to put the cards in the right order. With any luck, they'll be smart enough to keep betting, stay in the game, and take a shot at the big money.