Microsoft moves its Embedded division into ... Server and Tools?

There's some odd reorg-related news coming out of Microsoft today, September 20. The company is announcing that it is moving its Embedded business into the Server and Tools unit.

Microsoft's Embedded division -- which makes products like the Windows Embedded Standard and Windows Embedded Compact operating systems -- is now being "aligned" with the Management and Security Division (MSD) inside of STB. Here's Microsoft's explanation as to why this move makes sense:

"Moving forward, Microsoft will deliver end-to-end solutions from specialized devices to the cloud and meet the evolving needs of OEMs building devices and enterprises managing devices — this includes accessing data and consuming services, as well as exposing services that are used by other devices, applications and cloud services.

"Simply, Windows Embedded’s alignment with STB will help OEMs take advantage of the tremendous opportunity to develop devices that are built with the advantages of Windows and harness the extensive set of Microsoft technologies for inherent security and connectivity. This will empower users with access to apps and data at anytime, anywhere and on any device. For enterprises, this also translates into the opportunity to more effectively manage devices as part of their IT infrastructures in the cloud or locally."

Microsoft officials said on September 20 that by unifying the company's systems management unit with Embedded, Microsoft will be able to bring to market by 2011 an intelligent device management (IDM) solution. That "solution" -- which sounds like it is very much a work in progress, may include on-premises, cloud (or both kinds) of components and enable enterprises to do remote servicing and management for specialized devices.

As part of today's reorg announcement, Microsoft execs also said the company is moving its Microsoft Hohm energy-management service into the Embedded unit. Hohm was an incubation project from Microsoft's Startup Business Accelerator group, and members of that team have been working with a number of OEMs and device makers.

The Embedded unit was one of the parts of the company that was left without a natural home when Microsoft announced that former Entertainment & Devices (E&D) chief Robbie Bach was leaving the company and CEO Steve Ballmer would be overseeing the games and mobile businesses until further notice. At the time of that announcement, Microsoft execs said that the Mac Business Unit (another of the divisions that used to be part of E&D) was moving to the Office business unit. Officials declined to say until today where the Embedded division would be put.

Embedded has been, until recently part of the Specialized Devices & Applications (SDA) Group, headed by Corporate Vice President Rusty Jeffress. SDA encompassed Surface Computing, PC Hardware, Macintosh Business Unit and the Windows Embedded Business. There was no word today on where the Surface or PC hardware businesses are going.

I had been assuming Embedded might end up as part of Windows client or maybe as part of the Mobile Communications Business (since Microsoft's Mobilebusiness is one of the biggest -- though not the only -- OEM for the various Embedded division products).

I've asked what the move means, if anything, about the future product line up for the Embedded unit. Will that division continue to supply the core of the Windows Phone operating systems going forward? If I get any more info, I'll update this post.

Update: A spokesperson told me today's reorg "does not reflect any changes to Microsoft’s strategy for enterprise handheld devices." That's good. But it's not what I asked. I asked if the move signified a change for Microsoft's embedded operating systems strategy for consumer devices -- Embedded Standard and Embedded Comapct,. If I hear more on that, I'll update again.

Update 2: The same spokesperson added "This alignment with STB will not impact any of Windows Embedded’s existing platforms of technologies, including Windows Embedded Compact 7 and Windows Embedded Standard 7."