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Microsoft looking to restructure; will focus more on devices and services

Microsoft CEO Steve Ballmer is working on restructuring the giant software company, according to a report over on AllThingsD. This shuffling could see several current executives hold more prominent roles. Sources familiar with plans note that the restructuring will focus on solidifying Microsoft into the "devices and services company" that Ballmer previously wrote about in his annual shareholder letter.

We've already witnessed the company slowly move into hardware with its Surface family of Windows 8 tablets, as well as services that include Office 365, and Skype among others. It certainly makes sense for Microsoft to adapt to the demands of today's consumer. Reports note that while plans are being drafted, changes could well change drastically.

As noted above, the new configuration could introduce larger roles for the likes of Satya Nadella, president of the Services and Tools division; Tony Bates, president of the Skype communications division; and Don Mattrick, president of the Interactive Entertainment division. What kind of expansion said executives could see to their current roles remains unclear.

It seems most plausible that changes to the Microsoft organisational structure would centre around devices and services, both in the enterprise and consumer markets, while also simplifying its management. This potential restructuring comes amid increased investor pressure. Nomura Equity Research analyst Rick Sherlund wrote the folowing last week:

"There may be a shift in the wind upcoming for Microsoft, with shareholders potentially demanding a greater say in the direction of the company and how it might be run to drive a better return to shareholders."

Sherlund also suggested that Microsoft consider selling off its Bing search business and the highly popular Xbox unit. It has been disclosed that ValueAct Capital had bought around 1 percent of Microsoft's stock, which Sherlund notes could help push for change. ValueAct’s Jeff Ubben believes Microsoft has much potential and said it "could be the largest cloud company in the world" in a recent speech.

What we can take from here is that Microsoft shares have risen more than 31 percent, further pointing at changes in the wind. What's on the horizon is yet to be seen, but it's an exciting time to be following Microsoft nonetheless.

Source: AllThingsD

Rich Edmonds is a word conjurer at Windows Central, covering everything related to Windows, gaming, and hardware. He's been involved in technology for more than a decade and knows a thing or two about the magic inside a device chassis. You can follow him over on Twitter at @RichEdmonds.

  • At last
  • I think its high time
  • I think its the dumbest analyst. / shareholders.
    microsoft is doing fine, and it surely would be an idiotic decision to sell off Bing and XBOX..
    who is this joker....
  • @Alpha +1,000
  • I tell U! I'll sell off my XBOX at the same time then.
  • +925
  • Sell of Xbox? ARE YOU KIDDING ME? Is today April 1st?
  • Right!! Sell off Bing, and Xbox? WTF???
  • I think that joker has gone off his rocker. I was speaking generally of the company not the selling of Bing & Xbox. That would be hell.
  • Because apparently, with all the deeply rooted search integration in Microsoft devices, it just makes sense that they should use google, their nearest competitors product and increase googles brand image and reputation for free, or use an even more inferior search engine to irritate customers.
    Not even going to comment on the XBOX part of it: sell a console in what will be for the next 5 years a duopoly market with barely any competition. That's not even getting into the fact One is anticipated to be more significantly more profitable than the 360 due to its wider consumer appeal and service orientation.
  • Is that Jessica Alba? What a hottie!
  • +920
  • +925 :)
  • +928
  • She was hot before she was using WP, she's only a million times hotter with a Red Lumia in hand. By the way, she is a big instagram user. Can someone tweet her and let her know about Instance?
  • I was at that event in SF. Hot stuff :)
  • Dude I gotta know, is she that hot in person?
  • Yes, this is Jessica.. Can I help you?
  • Jessica, have you cut your hair?
  • Yes I did! Flattered you noticed. And, I got a tan too.....
  • Damn you look sexy ;-) ( I love the comment section :-D )
  • + xenon flash
  • Any new rumors of that Surface Phone?
  • IDK, but I'm with you on that question. While I am currently an avid Nokia WP user, I would love to see a surface phone! I''m waiting until the end of summer/holiday season to see if a surface phone is release.....I'll be one of the first in line to purchase one
  • Microsoft already Said like 2 months ago that they were not considering it because Nokia is doing such a great job!
  • Nokia is doing a great job. The tablet OEM's on the other hand... I am so glad Microsoft stepped in.
  • .
  • ,
  • Good news. Though i cant see an xbox sell off happening. Why sell a brand that is popular with the normal man?
  • I don't think they would.
  • Sell off Xbox...jesus Christ...someone get Gates back in control.
  • Especially since they have been trying to make their products the center of the living room and the xbox was the means to get there.
  • Services and devices? Might want to start with Xbox Video and Music first then! J-U-S-T. B-R-I-N-G. B-A-C-K. Z-U-N-E
  • + Infinity
  • Lol!
  • Microsoft would not sell of the Xbox brand, definitely not right now. They are making large efforts to turn Xbox into a multi-device wide ecosystem. This analyst doesn't seem to be worth his weight.
  • Which analyst is?
  • Rick Sherlund, the one in the above article that suggest that Microsoft sell Bing and Xbox
  • This doesn't sound like good news. Selling off Xbox business? Selling off bing? The changes to make Microsoft more nimble are great but giving shareholders more power makes me sick to my stomach
  • How can they even remotely suggest MS selling Xbox since it's not a video games box anymore it's allover everything MS does consumer wise ?!
  • Sell off XBox and Bing? Should Amazon sell off Kindle too? Maybe Apple should sell off iTunes? McDonalds could stop selling coke so they could focus on burgers too.
  • Haha, exactly
  • Except McDonalds doesn't own coke brand lmao fail example. I think big mac is the good example you were looking for.
  • Actually, no- which is why I said they should "stop selling coke" instead of "sell off coke." There is more to this than owership.  For example, the utter stupidity of ending something that brings in a huge amount of profit.  Get it? 
  • Whatchu talking about Willis?
  • I think you misunderstood, Bing and Xbox are Microsoft's products. MacDonald doesn't make Coca Cola product. So doesn't make sense. That's like saying Microsoft should sell off Samsung Galaxy brand...
  • Whatever! His point is that it's not a good idea for MS to sell off bread and butter brands.. GAL..
  • You must have 1 brain cell. I will try and dumb it down for you. The suggestion was that MS get rid of XBox and Bing, which both bring / have the potential to bring very high, long term revenue. Both compliment the rest of the products they sell, and in some cases make their other products stronger - e.g. Windows Phone, Win7, etc. Therefore not having them would be a big loss. JUST LIKE Coke strengthens the value proposition of a "Value Meal" at McDonalds. Not only does McDonalds make a huge profit by selling Coke, they also attract more customers with it. Do you now see how they are related? The original suggestion was that Microsoft should simplify their business, which is stupid. Just like it would be stupid for McDonalds to simplify and offer less products, like Coke. It is a very simple concept and I am sorry if your mother smoked crack.
  • Haha thanks for entertaining me. Come on, was cracking mama joke necessary?? I was just giving you a hard time =] wasn't personal.
  • You sir , have taken it well..
    Not many handle it the way you did :-)
  • Hahahaha .... That was really entertaining. Esp the last part..
  • minor quibble, but Satya Nadella is the president of Server and Tools, not Services & Tools. Restructuring STB to be Services & Tools would be big news! :)
  • They just rebranded their music and video platform to xbox music and video, so why would they sell their xbox division?
  • Microsoft, please do not let the shareholders dictate how the company is run. These people don't know what is best nor what the consumer wants all they know is how to protect their own money and how to make some more. Selling any division of Microsoft (especially Bing or Xbox after all the work that has gone into them of late) is stupid right now, you are on the right track Microsoft, just keep running down it! Stay strong and don't give in!
  • Simplifying management structure is a good idea. Microsoft has become too disjointed. It needs integration between all devices and services, which means each department must be coordinated.
  • Why would that analyst want them to sell off the Xbox?? Maybe I'm mistaken, but I thought that was a highly successful branch of the company, especially considering how the living room market is expanding so much these days.
  • Don't be surprised by an analyst suggesting Microsoft to sell off Xbox/Bing. What analysts/investors only care about is how to get biggest gain in shortest time, they never care about long-term strategy (although they often pretend they do).
    That's why smart CEOs never listen to those leeches.
  • Let's hope that the restructuring allows for MS to be even more nimble than they've seemed to learn how to be. Just the small fact alone that Skype & Lync are now connected is a huge step in the right direction and shows that MS is starting shed some of the red tape & bloat that held down the company for years.
    Remove the silos, get the Skype team, the Xbox team, the Danger team, the WP OS team, the Windows team, the mobile apps team, the Office team, the Visual Studio team, the Azure team, the Bing team & others all working together more and focused on becoming one Microsoft, and no company could stop them.
    And selling off Bing & Xbox would be like trading your two biggest stars when 1 or 2 players away from a championship. Why would that guy even suggest it?
  • I agree. Get all of your brands and services under one umbrella and working hand and hand.
  • Selling off Xbox and Bing!? What tomfoolery are they trying to promote? Anything is possibly, but that would be a disastrous move. Well, from my perspective as a consumer. At that point that might as well.sell everything! Lol. Xbox brings in too much money and very few, if any companies in this world would match the asking price buying Xbox brand would command. Plus, Bing is slowly becoming (if it isn't already) the second biggest search engine, which is a nice place to be in. Anyways, aside from those obvious rumors, it is exciting to follow MS now and see what they change for the future.
  • Rick Sherlund made these predictions to grab a headline. From a customer satisfaction standpoint, Xbox is one of the best known and well respected brands Microsoft owns. This guy is a joke.
  • I hate when analysts open their stupid mouths...Bing is embedded in the fabric of most of what Microsoft is doing, to sell it off is ridiculous. It would virtually disappear outside of Microsoft...
  • My local channel favors Bing map over Google. That says something about the product.
  • Sell off Xbox? Damn that's the dumbest thing I've ever heard. Like if Ballmer considered that Gates himself would stick him with a needle full of malaria. Not happening. But the rest of it yeah that's what they need to do.
  • Nothing wrong with restructuring the company but listening to shareholders is nothing short of idiotic. The company is posting higher profits every quarter. That's enough to satisfy a reasonable person but if you want to turn the company into another IBM then that's stupid. Microsoft is finally starting to see growth in its weakest areas...that alone should inspire some confidence in the company. Selling of the Xbox division would be proof of a narrow vision too. Lets just hope that doesn't happen. Bing, on the other hand is something I'm not entirely sure about. It's a good product but Microsoft needs to start making money off of it otherwise a search business is pointless.
  • I guess the question is will WP still be the redheaded stepchild if all this comes to pass?
  • obviously the guy who wrote this SMOKED the shit out of that bong
  • Sell Xbox not in a million years
  • What a dumb idea that would be to sell off Bing and Xbox...not a direction I would ever want Microsoft to go in. Besides I think those are two of the biggest items that fall under Microsoft's "Devices & Services". That analyst must be a Mac you he has an iPhone too haha
  • Sell the Xbox division?! wtf?...... NO.
  • AS a shareholder for many years, Selling off Bing or Xbox is something I would not like. Ok so my stock for the past few years have not gained in price share. However My returns on the stock are constant. The reason the stock is now moving up is not because they are thinking of doing this, rather it's moving up because Microsoft is staring to do good things. WP8-Win8 Xbox all moving as one. The Xbox moves into the home family room as no other the potential there is enormous  Microsoft is fine and will be there is no need to kill off the future just to satisfy shareholders who have no clue.
  • omg selling Xbox? LOL that guy was high when he said that '-'
  • "working on restructuring the giant software company"? Honestly just add the ability for custom text tones to the Windows Phone, everything else is fine
  • Anybody who actually believes Microsoft will prosper by selling off the Bing and Xbox divisions immediately loses any shred of credibility. It has been clear for some time now that Bing/Xbox investments are core to Microsoft's future in tomorrow's world of computing.
  • They definitely need to sell of Bing and XBox because Microsoft are just desperate for the money.
    Total moronic ideas, no doubt from a short term-quick profit setup that just wants to get a windfall of profits from Microsoft before moving onto the next short term project.  Although Bing would be lucky to break even probably, right now it is exactly where it needs to be as every 1% of the market they capture effects Googles advertising business model dramatically.
    If Bing gets to be over 40% then the revenue Google can demand for its adverts will be much less, and they might actually have to start selling their other services rather then giving them away for free with the provision of a tie-up to their search business.
  • I am not surprised if they sell off Bing and/or XBox. MS recently sold Mediaroom IPTV platform to Erricson.
    Mediaroom was used by many leading IPTV operators, yet they sold it (may be it was not generating enough revenue).