Microsoft polishes top brass in Ballmer power play

Microsoft has made some executive job changes that signal a major consolidation of power at the top.

The company has named Andy Lees as president of Microsoft's new Mobile Communications Business unit and Don Mattrick as president of the Interactive Entertainment Business unit.

The former will lead Windows Phone 7, due to launch on October 11, in the fight back against Android and the iPhone, and the later will handle Xbox 360. Both will report to Microsoft chief executive Steve Ballmer.

The duo had worked under entertainment and devices business unit president Robbie Bach, who announced his resignation five months ago amid tumbling mobile market share.

Microsoft also said that it has promoted Kurt DelBene president of the newly created Microsoft Office division.

DelBene was senior vice president of Office engineering inside the Microsoft Business Division - the group that president Stephen Elop quit last month to take up as CEO of Nokia.

Lees, a 20-year Microsoft veteran, and Mattrick, who joined in 2007, already ran their units as senior vice presidents. Nothing has really changed, except the uncertainty over which might lead E&D. Answer: neither. E&D has ceased to exist as a product group.

The description of their responsibilities demonstrates that while they might now be Microsoft presidents, they don't have the broad sweep of power normally associated with that title.

Lees will continue to oversee marketing and product development for mobile while Mattrick will continue to oversee a "wide array of businesses and services focused on consumer entertainment".

Nothing there about running global sales or PNL. These still lay with Ballmer, where they've been since May. This suggests today's promotions are stop gaps until either proves themselves further – or until somebody comes in from outside and E&D is revived as a product unit.

Meanwhile, DelBene does not inherit Elop's kingdom intact. Having come in from Juniper Networks, where he was COO, Elop was president of three global efforts: Microsoft Business Division and oversaw Information Worker (Office and Exchange), Microsoft Business Solutions (Dynamics), and Unified Communications.

DelBene's background is product development and engineering of Office. MBD now longer exists as a product unit and DelBene will just oversee engineering and marketing for Office, Exchange, SharePoint, Lync, Project, Visio, and speech. Dynamics, that Microsoft sells against Oracle and Salesforce, has been broken out and now reports directly to Ballmer.

The promotions are interesting for their timing and the choices that have been made. They suggest Microsoft was up against it. Internal promotions are laudable, and to be encouraged. But given these execs' strong experience in certain areas but not others – and the fact they've not been given complete responsibility – suggests Microsoft was unable or unwilling to find the right person from outside the company.

With Bach heading for the escape pod in May, Microsoft had nobody in official, full-time control of its phone or gaming strategies against Google, Apple, Sony, and Nindendo. Nobody likes drift, least of all investors.

All of which must make Steve Ballmer the hardest working and worst paid CEO of a top tech company. If Ballmer is running the global business side of Windows Phone 7, Xbox 360, Office, and the fight against Oracle and Salesforce, then it's miserable timing indeed that he got a reduced annual bonus of "just" $670,000 - equal to his annual salary.

He should have seized the opportunity and jumped to Hewlett-Packard, where apparently anybody can get $4m just to sign on as CEO, regardless of their lack of experience. Ballmer could also have doubled his Microsoft salary to $1.2m. ®