Speaking of which... (from Techweb)
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Ballmer's Power Seen Undiminished
(02/14/01, 6:18 p.m. ET) By Barbara Darrow, TechWeb News
Microsoft Corp.--never one to let the grass grow under its
feet--reshaped itself again Wednesday by naming a relative newcomer to
the presidency.
Rick Belluzzo's ascension to the presidency shocked even long-time
Microsoft watchers.
"For Belluzzo to move into the presidency definitely catches me by
surprise," said Dwight Davis, vice president of Summit Strategies, a
Boston researcher. "It seems almost unprecedented for someone other
than [chairman Bill] Gates or [former president Steve] Ballmer to be
in that spot."
Ballmer, who will retain the title of CEO, has been president since
1998. Before that, Microsoft (stock: MSFT) had an office of the
president, sometimes called "BOOP" for "Bill's Office Of the
President."
BOOP was in commission from 1992-96 and comprised Ballmer, Frank
Gaudette, and Mike Maples.
In 1996, BOOP evolved into the executive committee, a group of nine
top execs including Gates; Ballmer; Brad Silverberg; Bob Herbold; Pete
Higgins; Paul Maritz; Nathan Myhrvold; and Jeff Raikes.
Other Microsoft news--Herbold is retiring as COO--didn't raise many
eyebrows.
"The mail he sent basically said, 'I'm old, I'm rich, and I want to go
fishing,'" said an employee of Microsoft who requested anonymity.
Belluzzo is also assuming the COO role.
Belluzzo had spent years heading up printing operations at
Hewlett-Packard Co. (stock: HWP) before joining Silicon Graphics Inc.
(stock: SGI) as CEO.
He reportedly took the SGI post because he didn't expect to get the
top job from HP's then-chairman Lew Platt. Belluzzo stayed at SGI for
18 months before joining Microsoft in September 1999 as head of its
online consumer and commerce group.
"Ever since Rick came aboard, he's the guy to watch," said a different
source close Microsoft. "Steve [Ballmer] really respects him. [While]
MSN has not set the world on fire, at least it's had the same strategy
for a whole year, and you can't underestimate the value of that."
Ballmer wouldn't comment on why the company is being restructured into
a triumvirate, with Gates as chairman and chief software architect,
Ballmer as CEO, and Belluzzo as president and COO.
In an e-mail message responding to questions, Ballmer said the move
will allow him to "focus on product strategy with Bill."
And, he noted that Herbold had been planning his move for a year.
This is "nothing sudden," Ballmer wrote.
In a memo sent out to Microsoft staff, Ballmer said, "As President &
COO, Rick will guide the company's business strategy and direct
business operations, sales, marketing, and business development, as
well as Microsoft's emerging non-PC efforts.
"As Rick transitions to his broader set of responsibilities," Ballmer
continued, "I will spend more time focusing on Microsoft's overall
strategic direction and working closely with Bill; Raikes; Jim
Allchin; Bob Muglia; and others to develop great products, drive
customer feedback and satisfaction, achieve industry thought
leadership, and successfully engage the competition."
Belluzzo will continue to report to Ballmer. Other key executives,
including Raikes; Allchin; Rick Rashid; Linda Stone; and Sanjay
Parthasarathay also report to Ballmer, spokesman Bill Zolna said.
Everyone is reading the tea leaves in the move, examining every detail
of the reporting structure.
"If you read between the lines of the press release, you'll see
something interesting, and that's that [Orlando] Ayalla, who reported
to Ballmer, appears to have shifted to reporting to Belluzzo," said
Paul DeGroot, editor of Directions of Microsoft, an industry
newsletter. "Raikes, who had Ayalla's job before, would never have
reported to Belluzzo."
Before, Ayalla was group vice president of worldwide sales, marketing,
and services. Raikes was group vice president of productivity and
business services.
Nearly everyone agrees that Microsoft, Redmond, Wash., is not the
lean, mean, fighting machine it once was.
"This is not the same company it was even two years ago," said Tim
Dempsey, vice president of marketing for Bowstreet Software, a
Portsmouth, N.H., software maker. "Nobody is afraid of them anymore.
No one cares as much about them anymore."
But Microsoft says it has no plans to take any cost-cutting
measures--including layoffs--despite indications to the contrary.
"I am not aware of any Microsoft job layoffs," Zolna said. "In fact,
Microsoft currently has approximately 5,000 reqs open."
Dempsey was a former executive at Lotus, which was locked in a
long-running battle with Microsoft in e-mail and messaging.
A string of executive departures, including that of Maritz, group vice
president of platforms and strategies last September, has led to some
of the problems, as has the antitrust war the U.S. Department of
Justice is waging against the company.
The antitrust battle has taken its toll psychologically on many of
Microsoft's executives, despite the huge personal profits they have
made working for the company.
"Herbold said he spent 60 percent of his time on antirust, but he also
had responsibility for HR and a lot of other things," said Summit's
Davis. "That couldn't have been pleasant."
Others said the company's usual lightening-quick timing appears to be
off as well.
The same company that turned on a dime to get into the Internet fray
somehow lost its footing in the antitrust battle, most agree.
"The minute the Justice Department got serious, Bill Gates should have
left and Ballmer should have been in front of that controversy,"
Dempsey said. "He's bellicose, he's a pit bull, but all the while
people find him in some bizarre way irresistible, even likable."
News now that the Justice Department is potentially opening up a new
front in that battle--over Microsoft's dominance in office
productivity software--is yet another distraction.
The Justice Department is reportedly looking into Microsoft's
investment in Corel Corp. (stock: CORL), a maker of a competitive
office suite.
The Fed apparently wants to know if the investment was made to take
Corel out of that market. Microsoft has said it is cooperating with
that inquiry.
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-JCJ |
