Microsoft restructure could lead to bigger role for Don Mattrick
Sources have told AllThingsD that Microsoft chief executive officer Steve Ballmer is planning a major restructuring of the company. The plan will attempt to reconfigure the company around devices and services in consumer and enterprise markets, a focus mentioned by Ballmer in his letter to investors on October 2012.
"This is a significant shift, both in what we do and how we see ourselves - as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses. The work we have accomplished in the past year and the roadmap in front of us brings this to life," wrote Ballmer in the letter.
According to the report, certain key executives could see expanded roles, including Interactive Entertainment division Don Mattrick, Skype president Tony Bates, and Servers and Tool president Satya Nadella. The plan is also intended to simplify Microsoft's current management structure, which is currently quite complex and prone to infighting. Corporate clashes were reportedly one of the reasons for the departure of Windows president Steven Sinofsky last year, only a few weeks after the launch of Windows 8.
In a note last week, Nomura Equity Research analyst Rick Sherlund said that the planned change is due to shareholders looking for a better return on Microsoft stock. Sherlund also recommended that Microsoft should sell off its Xbox and Bing search divisions. He admitted that the Xbox division is doing well, but "it doesn't seem like a good enough business for Microsoft to focus on."
"There is a shift in the wind upcoming for Microsoft, with shareholders likely demanding a greater say in the direction of the company and how it might be run to drive a better return to shareholders. We think there are a number of things that could be done to improve the return of cash to shareholders and improve the profitability and cash flow of the business," he wrote.
"Xbox is one of the areas of success for Microsoft and is cool to consumers, but it is perhaps time to assess whether this can ever be material to the overall company and might be more leveragable to a consumer-oriented company such as Samsung. Perhaps they would be willing to pay several billion dollars for this to leverage their substantial consumer electronics business?"