Microsoft Reunifies Windows Divisions

[Mitch Stone <mstone@vc.net>]

Microsoft Reunifies Windows Divisions 
By Computer Reseller 
News Dec 3, 1999 (12:31 PM) 
URL: http://www.techweb.com/wire/story/TWB19991203S0020  

Microsoft unveiled a significant realignment and executive changes on 
Thursday. The move reunifies all of its Windows products under one 
umbrella, maintains its applications under another, and creates a renamed 
consumer division without any Windows offerings.  

The Redmond, Wash.-based software company, which may be bracing for a 
potential breakup, said it has reunified its previously separate consumer 
Windows division and business and enterprise division under one group, 
the Windows division, which will be headed by Brian Valentine, who has 
been promoted to senior vice president.  

Jim Allchin, who most recently served as senior vice president of both 
the separate business and enterprise division and the consumer Windows 
division, was promoted to group vice president and will have 
responsibility for the entire platforms group. The newly tinted Windows 
division will include the entire fleet of Windows trademarked offerings, 
including its forthcoming Windows 2000, 98, and Millennium versions.  

As part of its sweeping reorganization in late March, Microsoft had 
established separate Windows business and Windows consumer products 
divisions to serve the distinct customer segments. Those changes are 
nullified with the latest restructuring.  

Analysts said Microsoft, interested in maintaining its natural monopolies 
of its Windows and productivity application technologies, is making the 
right move.  

"They're sending a signal to the arbitrator [federal mediator Richard 
Posner], and I think putting Windows in one box is the right way to 
divide it up," said Ted Schadler, group director for research at 
Forrester Research, Cambridge, Mass. 

Schadler said he advocated such a self-imposed breakup of Microsoft two 
years ago.  

"I believe that's the right alignment," he said. "Microsoft should just 
break itself up along those lines so it can sustain its natural 
monopolies rather than have a 'Baby Bill' breakup. This benefits 
everybody. The company will lose more trying to keep itself together." 

Following U.S. District Court Judge Thomas Penfield Jackson's findings of 
fact in November, which declared Microsoft is a monopoly, several forms 
of a company breakup, including a vertical one that would create several 
so-called Baby Bills and another horizontal restructuring, have been 
under consideration by federal and state officials as potential remedies. 
Under one scenario, a horizontal restructuring would separate the 
company's operating systems, applications, and Internet businesses.  

As part of Friday's realignment plans, Bob Muglia was promoted to group 
vice president for the business productivity group and will continue to 
lead the charge and manage the development of Microsoft Office, 
BackOffice, and software for productivity applications, including 
palm-sized PCs and eBooks. Muglia, who was formerly a senior vice 
president, also announced the creation of a small business division.  

In addition, Steven Sinofsky was promoted to senior vice president of 
Microsoft Office, and Paul Gross was promoted to senior vice president of 
Server Applications.  

Microsoft also revealed a renaming and realignment of its consumer and 
commerce group. That group, which has been renamed the consumer group and 
will continue to be led by group vice president Rick Belluzzo, will 
comprise seven divisions, including a consumer services division led by 
David Cole, who was promoted to senior vice president. Cole was 
previously vice president of the consumer Windows division. The consumer 
group will also include home and retail, MSN.com, TV service and 
platform, Transpoint, and consumer strategy and partnerships divisions, 
Microsoft executives said.