Microsoft splits its Platforms & Services unit in two

Microsoft splits its Platforms & Services unit in two

Summary: Microsoft announced on July 23 that it is cleaving its Platforms & Services Division in half and the head of the formerly combined unit is leaving the company.


Microsoft announced on July 23 that it is cleaving its Platforms & Services Division in half and the head of the formerly combined unit is leaving the company.

Microsoft is carving up the so-called PSD unit along the natural fault lines. The Windows and Windows Live team will be one unit, run by three senior vice presidents (Steven Sinofsky, Jon DeVaan and Bill Veghte. And the Online Services Business (OSB) will be headed by a new, and as-yet-unnamed senior leader. Microsoft is conducting a search inside and outside the company for that person.

Both of the new, separate divisions (Windows/Windows Live and OSB) are reporting directly to CEO Steve Ballmer.

Kevin Johnson -- one of Microsoft's three presidents and the current head of PSD --  is leaving the company as part of the restructuring. No date or reason for his departure was provided at the time I posted this blog entry.

Update No. 1: Johnson is going to run Juniper Networks, according to the Wall Street Journal. Still no word if his departure from Microsoft is voluntary or not. (I'm betting the latter.)

In its press release announcing the shake-up, Microsoft highlighted that the two businesses -- Windows/Windows Live and Online -- are doing well.

The reality is a bit different. Microsoft has been struggling to convince the market that Windows Vista, of which it has sold 180 million copies since launch, isn't a flop. And the Online Services Business continues to be a sink hole for resources, as Microsoft's latest financial results indicated.

Today's announcement has left me wondering about a couple of things:

* Why has Microsoft decided not to appoint a single head of Windows as part of this latest reorg? It sounds like a triumvirate (head of Windows/Live engineering Sinofsky; head of Microsoft's Core Operating System division DeVaan; and head of Windows/Live marketing Veghte) will run "Platforms." Why is there no single Windows/Windows Live champion -- other than Ballmer himself -- and no plans to look for one?

*  What kind of person is Microsoft seeking to run OSB? Has the company already decided against promoting Brian McAndrews, the former head of aQuantive, into this role? (I hear Microsoft is expecting McAndrews to be a "strong candidate.")

* How much, if at all, did the Microsoft-Yahoo debacle play into this shake-up?

In the meantime, what's your take? What's behind the latest reorg -- and will it matter?

Topics: Software, Microsoft, Operating Systems, Windows


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • johnson leaving

    First of all, this is good news. It's not like he as done a good job running this companies marketing and online business. This is good news. Microsoft is making changes and its for the better. For all your naysayers who like to thinks these guys are clueless, you have a deep bench (mcandrews, ozzie etc)so not a big deal, plus Microsoft has an ally now in Juniper that will probably go alot deaper which will help fend off Cisco's encroachment. Microsoft should buy and make Benioff the heir apparant and stop messing around. ;)
    • Some change has to happen ...

      to fix that leaky online service. KJ certainly didn't impress managing that portion.
    • Perhaps

      Though if Johnson was shown the door rather than voluntarily went through it then Juniper may turn out not to be the close ally you think it will be.

      As for MS and Cisco you're way off base there because they're in totally different markets where Cisco has a solid long standing lead, followed, now, by Barracuda and then Juniper. If anyone is trying to encroach it's Microsoft.

      As for Ray Ozzie, I'm sure most people thought he was at Microsoft as more than just highly paid bench strength. If that's all he is then there may be more problems at MS that we know about.

      All in all, quite interesting.


    • a big assumption

      If he has not done a good job I'd think he's not leaving on the best of terms. With that in mind why would Johnson want to cut a deal sweet for MS? I'd expect if indeed Juniper "beds" with MS it will be the best deal possible for Juniper.
  • RE: Microsoft splits its Platforms

    Maybe they're not going to be an advertising company after all. I vividly remember being in an all-hands a couple of years ago, when KJ had just arrived. He came in in his pressed shirt and cufflinks and did a ten-minute PPT show about how we were now in the ad biz. Nobody had a clue what he was talking about.
    • Johnson's been at MS for 16 years

      He hadn't "just arrived" a couple of years ago. You may be thinking of Kevin Turner?
  • KJ was on the outs...

    I remember when my rep brought Kevin Johnson around a few months ago. My rep had said many of the intelligentsia within Microsoft were not too fond of him. I greeted him with constrained enthusiasm as I was told to do so by my rep. It was all Johnson's fault that people PERCEIVED Vista to be sluggish and buggy. Because of Johnson;s lack of vision, he will now suffer to run a 3rd rate networking company. I emailed him and told him NEVER to come around my office selling his Juniper wares; we were an all RRAS shop. I don't use bloat like Juniper or Cisco.
    Mike Cox
    • Ahh a Quickie .....

      eh Mikey .... get you only a 5.5 and that's because of the

      "I greeted him with constrained enthusiasm as I was told to do so by my rep. "

      But still nice to see ya around again ...
      • Remember...

        One of the rules of satire is to have truth lurking in the background and not all that far in the background, either.

        I'm giving Mike a 6.0 for this cause I get the impression he's onto something in that post.


  • Another Suffle to Hide Revenue Problems?

    [B]Microsoft is changing yet again the way that it will report its financials. Instead of reporting the financial results of seven business units, Microsoft now will report results of five units. [/B]

    That was 2006.

    As long as they keep shuffling organizations around, it's easier to hide which make money and which lose money.

  • Quite likely that his leaving was voluntary

    He's been at Microsoft for 16 years, and has been a President for the past 3 -- directly under CEO Ballmer. In other words, he can't go up any further. If Johnson is itching to be a CEO, he knows it's not going to be at Microsoft anytime soon, so it makes sense to go somewhere else.
  • But.......

    What about the Linux division? Who will run that?
  • RE: Microsoft splits its Platforms

    Probably not a disaster, but doesn't address fundamental structural problems in the bigger part of the business. Now, if Ballmer was leaving, that would be news.
    still fiddlin
  • Kevin Johson

    Had the pleasure of working with him a couple of times during my 13 years at Microsoft.

    He was a great guy with excellent vision and a willingness to listen to those around him.
  • RE: Microsoft splits its Platforms

    Perhaps the new OSD leader will come FROM Yahoo?
  • RE: Microsoft splits its Platforms

    This might well be a good thing for Microsoft. It has nothing to do with Kevin Johnson, but rather a culture that had previously purchased willing companies whom had designed products MS would be either willing to purchase to bury or purchase to incorporate.

    The concept now is for Microsoft to become a company that CAN tackle the new realization of what the internet represents to people and what their OS products mean in terms of productivity.

    Surprisingly so no one has mentioned that such a split was originally suggested in at least one of the Microsoft monopoly suits filed by numerous governments and corporations.

    Sometimes regulation does work. AT&T was divested and has returned to 5/7s of it's strength through purchases and will probably be broken up again if the courts turn out to be the people's court, but often monopoly suits are predictive.

    MS will be better off seperating its operating system from its applications, cloud or direct. People will be better off having the opportunity to decide where they will spend their money.

    And Kevin Johnson isn't really part of this equation.
  • RE: Microsoft splits its Platforms

    I would put Gary Greenbaum in charge of Windows. He is an over the top genius with vision.
  • RE: Microsoft splits its Platforms

    Microsoft just joined the two groups not too long ago. I'm not surprised they are splitting again.
    I get that his leaving was voluntary. . .
  • RE: Microsoft splits its Platforms

    Microsoft is still having one heck of a time grabbing a toe-hold in the internet market. In my opinion, this is a long overdue move by Microsoft and shows the difficulty of large companies transitioning business focus. Either that, or at Microsoft there's a lack of executive-level thinking ability by the CEO and executives. Hmm... for the sake of the 90,000 Microsoft employees I sure hope this slowness to act is just due to momentum and the difficulty of transitioning business focus. On a related note: I kind of saw this coming back in February...

  • RE: Microsoft splits its Platforms

    Bill was the King. Balmer wants to wear the crown He'll voluntarily/force all senior people out to make it easier for him to wear that crown!