Microsoft announces internally its new 'commercial and consumer' sales model

Microsoft is reorganizing its sales force around new models, with a focus on digital transformation. Here's what's changing.
Written by Mary Jo Foley, Senior Contributing Editor

Microsoft officials are informing the troops today, July 3, about the company's anticipated sales reorganization.


Executive Vice President Judson Althoff sent employees a memo about the company's "new commercial and consumer model," to explain the restructuring. Today's memo did not mention anticipated headcount cuts that are expected to figure into the reorg.

Microsoft is now organizing its commercial field sales team around two customer segments: Enterprise and Small, Medium and Corporate (SMC), according to the memo.To address enterprise customers, Microsoft is focusing on its highest growth opportunities, Althoff said, by operating across account teams for commercial and public sector; specialist team units focused on new business; and new "customer success units" that will focus on driving usage and consumption of products and services.

These three units will be dubbed the "Enterprise Operating Unit." The Enterprise Operating Unit will work with Microsoft's Marketing and Operations, previously announced One Commercial Partner, Enterprise Services and Commercial Software Engineering teams. Commercial Software Engineering, or CSE, is what was the technical core group of Microsoft's recently disbanded Developer Experience (DX) unit, led by Technical Fellow John Shewchuk.

Althoff said Microsoft, going forward, is targeting six high-priority vertical markets: Manufacturing, Financial Services, Retail, Health, Education and Government. (Note: These already were vertical targets for the company.) Additionally in Enterprise, Microsoft is charging its sales, partners and services team with addressing four "solution areas," he said. The four, more horizontal areas of focus:

  • Modern Workplace
  • Business Applications
  • Apps and Infrastructure
  • Data and AI

In the SMC segment, Microsoft is focusing on both corporate accounts and small and mid-size businesses (SMBs). The SMC team will be divided into a handful of teams, namely Global Demand Center, which is designed to deliver direct revenue, sales leads and "consumption at scale"; Inside Sales; Marketing & Operations; Field Sales for SMC customers; and One Commercial Partner.

Microsoft announced the formation of One Commercial Partner, which will play a role in selling to both Enterprise and small/mid-size customers, in January this year.

Microsoft will continue to beat the "digital transformation" drum as part of this reorg, and will talk about it not just in terms of business users, but also consumer ones spanning work, school and home. Microsoft is continuing its push to try to grow its base of fans, and is counting on Surface, Office 365, mixed reality and gaming across all device types to help them do this.

Microsoft officials held an all-hands meeting for those affected earlier today. More memos and details about the impact of the reorg are expected to trickle out over the rest of this week, just ahead of the company's worldwide partner conference and company-wide sales meetings, which are happening over the next two weeks.

So far, I have to say the changes announced today don't seem like they'll have a huge impact directly on customers. I also don't really see how this will change the way Microsoft works with its partners. (If anyone else does, please chime in.) But let's see what else comes down later this week.

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