Terry Myerson

No Wonder Microsoft Is Very Different

Stephen ElopIt’s hardly a surprise Microsoft has finished off the job of replacing its top managers. The company has been changing leadership considerably for the past year as a big sign of a company finally moving forward well. But it is somewhat striking that, in an industry where changing senior leadership in the biggest companies has been minimal, Microsoft has been mostly promoting the new.

The biggest news in the latest turnover is the unsurprising departure of Stephen A. Elop. Five years ago, when a very different staff worked for Steven Ballmer, Elop, the one-time CEO of Macromedia, was running Microsoft’s critical business division. He left in 2010 to become CEO of Nokia, a move that correctly predicted a Microsoft’s acquisition of the Finnish phone maker, then ended up back as a senior executive at Microsoft. But his role gradually faded away with the rest of the Nokia/Windows Phone’s position. (Another departure is Chief Strategy Officer Mark Penn, the politically oriented PR specialist who had come up with the hideous Scroogled campaign before he and his role were forgotten.)

At a time when the senior management of Apple and Google (other than the death of Steve Jobs) is mostly still in place, Microsoft under Satya Nadella has been pushing out the senior managers in the 16 months since he has taken over. Although many of the new top execs have years of experience–Nadella himself has been at Microsoft since 1992–his move up the ranks has been slow and steady. Interestingly, while he has been a critical player in the building of the cloud effort, he has never been a top Windows player, traditionally the main path.

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Ballmer, Brummel, Elop, Klein, Muglia, and Sinofsky are all gone. Chief Operating Officer Brian Kevin Turner, General Counsel Bradford Smith, and research chief Craig Mundie are the only veterans still on hand. And, while they hold important jobs, they are not the people involved in the critical move of Microsoft from its traditions to a new world.

Terry MyersonThe choice of new executives is part of yet another organization of Microsoft, but one that appears to represent the direction Nadella really wants to go. Windows is hardly going away as a top unit–it remains far too important for that. But Terry Myerson takes charge of a new Windows and Devices Group, combining the key operating system with the devices functions run by Elop. It includes Lumia phones, Surface, Surface Hub, HoloLens, Band, and Xbox. Myerson, a software and engineering specialist, has been with Microsoft when Intersé, his company, was acquired in 1997, and has been a big player in phones and Windows.

Scott Guthrie leads Cloud and Enterprise, which is one of Microsoft’s leading growth areas where the company is competing with Amazon Web Services and a fleet of smaller but vigorous cloud players. The organization combines the Dynamics software group, providing the growing CRM and ERP services as part of the cloud operation. Guthrie, who joined Microsoft in 1997, has been running the increasingly successful Azure project.

Qi Lu will continue to run Application and Services Group. The little-known operation of many of Microsoft’s key products. Its functions include Office, Skype, Outlook.com, and Bing. One key change has been a steady movement of these services from core pieces of the Windows world to services designed to spread to a broad range of devices, including aiming at been important players for both Apple and Android.

Of course, it will take some time to see if the effects of this latest–and hopefully lasting for some time–reorganization will make a difference. After a long period of drift, Microsoft seems to finally be moving again.

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Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.

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