By Rachel Chalmers
Microsoft Corp has admitted that it is planning to make adjustments to its corporate structure, but a company spokesperson who spoke to ComputerWire would not confirm the details or even the timing of these changes. A Wall Street Journal article published on Friday claimed that Microsoft is about to announce a major reorganization which will see the company divided into four major groups. The plan is said to be the brainchild of Microsoft president Steve Ballmer. Apparently, Ballmer wants to structure the company around the needs of broad customer groupings, rather than around particular products or engineering projects.
Ballmer’s main problem is the vacuum at the top of Microsoft’s troubled Interactive Media Group (IMG). Since Pete Higgins jumped ship in November 1998, the IMG has been headless. Ballmer has overseen the group but its location on a separate campus makes life difficult for all concerned. The WSJ says Microsoft sought an appropriate leader for IMG externally, and also reports that the perpetually-on-sabbatical programming wizard Brad Silverberg was offered the job, but that he turned it down. For the time being, the paper claims, responsibility for IMG will rest with MS Office czar Jon De Vaan along with marketing guru Brad Chase.
Under their joint guidance, IMG will become the group responsible for handling consumer relations. Meanwhile Paul Maritz, generally seen as the third in the ruling triumvirate that includes Gates and Ballmer, is to head a new division aimed at software developers. The two remaining divisions already exist. Jim Allchin, who heads an enterprise unit and oversees development on Windows 2000, will cater to CIOs, while Robert Muglia’s applications group will serve the needs of knowledge workers.
If the government succeeds in its antitrust case against Microsoft, it will try to prevent Microsoft from engaging in similar bad behavior in future. One remedy that has been proposed is breaking the company up. Pundits wonder whether this reorg is Microsoft’s way of pre-empting such an eventuality. In particular, Zona Research Inc speculates that Microsoft may see a forced breakup as inevitable, and may already be working to make the best of it. The numerous missteps by Microsoft during the legal proceedings are uncharacteristic for the company, explained Zona VP Harry Fenik. Microsoft’s less than stellar courtroom performance leads us to believe that the company may already be planning its contingency to capture the market opportunities it foresees in the next decade.
In contrast to most observers, Zona asserts that such a breakup would be good for the company. In a paper titled United We Fall, Divided We Stand, Fenik argues that even if Microsoft were broken into four Baby Bills, shareholder value would be preserved and Microsoft’s ability to compete in a broad range of markets would continue undiminished. Whether Ballmer’s plan is in fact a bid to secure Microsoft’s legacy against government intervention, remains to be seen.
