Microsoft Plans to Reorganize Into 4 Groups, Bring Back a Top
Programmer
Microsoft Plans to Reorganize Business Into 4 Groups (Update5)
(Updates with reorganization details in 20-24th paragraphs.)
Redmond, Washington, Feb. 7 (Bloomberg) -- Microsoft Corp.,
the No. 1 software maker, said it plans to reorganize into four
groups to focus on customer service and hopes to bring back a top
programming wizard who spearheaded the development of Windows 95
and the Internet Explorer browser.
Brad Silverberg, 44, a former Microsoft executive now on
leave, has been invited back to head the proposed consumer group,
company spokeswoman Marianne Allison said. The other three groups
would be corporations, software developers, and home-office
workers and telecommuters. Allison said an announcement is likely
in March. The plans were first reported in the Seattle Times.
Microsoft has been distracted from its business by
embarrassing setbacks in the landmark antitrust trial against it.
The realignment is seen as a way to refocus on customers and
Silverberg's ascension is regarded as a major push into the
Internet. Silverberg was a popular leader among programmers and
is seen as visionary.
''The trial does cause you to take your eye off the ball,''
said Rob Enderle, an analyst with Giga Information Group, who is
familiar with the reorganization plans. ''People are not
completing tasks that need to be completed, to come out with
quality products in a timely fashion.''
He cited as an example last week's trial testimony by Jim
Allchin, Microsoft's senior vice president for personal and
business systems.
A videotape shown by Allchin purported to demonstrate how
the Windows computer operating system is undermined by the
removal of the Internet Explorer browser. Yet cross examination
revealed a glitch in the videotape, forcing Microsoft to hastily
arrange a second videotaped demonstration to make its point.
''He hadn't reviewed the tape adequately,'' Enderle said.
''They've been crucified, his is the most damaging testimony to
date.''
Ballmer's Review
The reorganization plans follow a sweeping review of
operations by President Steve Ballmer, Bill Gates's right-hand
man.
''When Ballmer did his review he realized the organization
was disconnected from customers, organized around technologies
and not customers,'' Enderle said.
Silverberg couldn't immediately be reached to comment.
Ballmer, who was an assistant products manager for Proctor &
Gamble Co. before joining Microsoft, has been leading Microsoft's
reassessment of its structure, Allison said.
''People who know about Ballmer know he spent time in the
customer world,'' she said. ''He's always a source of input to
Bill and the company on how customers look at solutions.''
Ballmer also has been running Microsoft's interactive media,
which includes the MSN network of Web sites, since November when
Pete Higgins resigned as vice president for that group.
''This is fallout from Steve taking over from Bill, making
fixes that have been needed for some time, focusing on the
customer,'' Enderle said.
Internet Force
Silverberg has been on leave for about two years after
losing a corporate power struggle. He recognized the widespread
competition posed by the Internet early on and sought to have
Microsoft more broadly positioned to capitalize on the Web.
In an April 1996 internal company document, the senior vice
president said the competition ''is not about browsers.''
Netscape, Sun Microsystems Inc. and others ''are trying to
create an alternative platform to Windows,'' he said. ''They are
smart, aggressive, and have a big lead. This is not Novell or IBM
we are competing with.''
Silverberg left Microsoft in the summer of 1997 after
apparently losing a power struggle with Allchin.
Silverberg wanted to build Internet Explorer into a system
based on the Internet so it would work with various kinds of
computers. Allchin wanted to imbed Internet Explorer into the
Windows operating system, as was done.
The April 1996 document is among those filed by the U.S.
Justice Department to support its landmark antitrust suit
claiming Microsoft is abusing its monopoly in personal computer
operating systems by extending it to the Internet, crushing
rivals such as Netscape.
Four Groups
The consumer group would include the Windows system,
personal applications and online entertainment, chat and
communications, the Times said. The enterprise group would
include Windows 2000, formerly known as Windows NT, the operating
system for corporate networks, the paper said.
The developers group would aim to rebuild relationships with
programmers enticed by Sun's Java and Internet applications, the
paper said.
The knowledge-workers group would focus on home office
workers, small businesses and mobile professionals who use the
Office group of word processing, speadsheet and presentation
software, among other products.
Microsoft's Allison declined to confirm the details.
Allchin would probably head the newly created enterprise
group, in charge of corporate customers and agencies, the Times
said.
Allchin is currently responsible for all Windows software
developments and Internet technologies. His responsibilities
include Windows 2000, which has been plagued by delays and now is
to be released in the second half of this year.
The reorganization plans come as the Justice Department is
considering tougher remedies against Microsoft in the landmark
case. People familiar with the government's strategy said a break-
up of the company is one remedy government lawyers might seek if
U.S. District Judge Thomas Penfield Jackson rules that Microsoft
used illegal tactics to protect its Windows monopoly, the people
said.
The realignment will be as important as those following
Gates's 1995 speech outlining the company's initial push into the
Internet and the early 1990's break with International Business
Machines Corp., Enderle said.
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