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Fewer chairs remain after Microsoft reshuffle

Put it down, Steve. Gently

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Microsoft has rejigged the company's reporting structure, collapsing the seven divisions created in 2002 into three new ones. It's a bid to deal with the process issues that have bedevilled the company, exemplified by the delivery of Microsoft Vista three years later than planned, and several features short.

The changes are "designed to align our Business Groups in a way that will enhance decision-making and speed of execution," reads the canned quote from Fester that's supplied in the press release.

In five years since Ballmer took over the CEO's job from Gates, Microsoft has moved from anarchy to a Kafkaesque bureaucracy. The culture of "MaMaM", or meetings about meetings about meetings, is well known in the industry, but reached a wider audience with defection of Microsoft's China Labs chief Kai Fu Lee to Google, which led to suit and countersuit. Microsoft's inefficiencies even amused the Chinese Communist Party, Lee alleged.

In addition to the major restructuring, Microsoft also announced an expanded advisory role for CTO Ray "Lotus Notes" Ozzie, and that veteran Windows manager Jim Allchin will step down at the end of 2006.

The reshuffle sees the Information Worker division and the Business Solutions division collapsed into a new Business Division. That's one less chair, and nine fewer syllables.

The Home and Entertainment division responsible for Xbox and Flight Simulator is merged with the Mobile and Embedded division to create the new Entertainment and Devices Division. That's one less chair, too, and six fewer syllables.

Robbie Bach will head up E&D, and Jeff Raikes the Business division.

Everything else, including MSN and tools, as well as the cash cows of Windows and Office, is collapsed into Allchin's Platform Products and Services division.

Jupiter's Joe Wilcox points out that this breaks the close alignment between Office and Server, and Office and Tools, that has been such an important part of Microsoft's enterprise success. Think, for example how the Outlook client bundled with Office drove Windows Exchange server sales as Redmond successfully targeted first the department, then the enterprise.

"The amount of integration between Information Worker and Server & Tools products is staggering. In fact, several server products are actually part of the Office group, and Microsoft's 2006 product strategy is all about server software-to-Office integration," writes Joe.

" Microsoft's doesn't want to mess with the Office-and-server formula. Remember that New Coke fizzled."

It's at odd with what Microsoft wants users to think of as a new platform: "Office Server".

The new structure will help Microsoft target verticals more closely. Moving people off old versions of Office, which as Chris Caposella acknowledged most users deem "good enough", is a priority for 2006.

For continuity, the seven old divisions keep their accounting structures intact.

And the reaction from inside Microsoft?

We turned to Microsoft's most famous weblogger - a character renowned and lauded for his integrity.

But no word, yet, from Who Da'Punk.

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