Windows de-emphasized in favor of cloud

Microsoft is reorganizing its engineering teams, the company announced late last week, in one of the largest restructurings since CEO Satya Nadella took over four years ago.

The shift will de-emphasize the company’s flagship operating software, Windows, and put the spotlight on its Office productivity software, cloud and artificial intelligence technology.

Nadella made the announcement Friday March 29 in a email to employees:

“Today, I’m announcing the formation of two new engineering teams to accelerate our innovation and better serve the needs of our customers and partners long into the future,” he said, “Over the past year, we have shared our vision for how the intelligent cloud and intelligent edge will shape the next phase of innovation.”

In his announcement, Nadella noted that:

  • Computing is more powerful and ubiquitous from the cloud to the edge
  • AI capabilities are rapidly advancing across perception and cognition fueled by data and knowledge of the world
  • Physical and virtual worlds are coming together to create richer experiences that understand the context surrounding people, the things they use, the places they go, and their activities and relationships.

“Today’s announcement enables us to step up to this opportunity and responsibility across all our Solution Areas.”

Who will stay and who will go

  • Windows devices chief and longtime Microsoft executive Terry Myerson will leave the company as part of the moves. Myerson, who joined Microsoft after it bought his startup in 1996, will stay on for a few months.
  • The reorganization will create two engineering teams, largely pieced together from what is now the Windows and Devices division. Rajesh Jha, who now leads parts of the Office team, will oversee a group focused on devices and expanding software such as Windows and Office to follow users wherever they go.
  • Scott Guthrie will direct a second group focused on cloud and AI technology.

The reorganization elevates two of Microsoft’s most successful businesses in recent years. Microsoft’s cloud computing division, Azure, has been one of its fastest growing businesses, and its Office 365 subscription service is attracting users quicker than many expected.

“To truly get the best impact from our efforts,” said Nadella,  “we will have to push ourselves to transcend Conway’s law.”  Named after computer programmer Melvin Conway, Conway’s law states that any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communications structure.

“Having a deep sense of customers’ unmet and unarticulated needs must drive our innovation. We can’t let any organizational boundaries get in the way of innovation for our customers. This is why a growth mindset culture matters. Each one of us needs to push on what technology can do for people and for our world. It will take courage to keep learning and growing together — encouraging one another’s individual strengths, building more diversity and inclusion across our teams, and collaborating as One Microsoft. It’s amazing what we have been able to accomplish together, and yet I still believe we are in the very early days of what is possible.”

Menlo Technologies will follow this reorganization as it unfolds, and will share insights-stay tuned!


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