SEATTLE -- Yes, the ongoing speculation was correct: Microsoft is reorganizing to focus on customer groups and needs rather than on products and technology.
The move, however, has nothing to do with an ongoing federal antitrust trial against Microsoft in Washington, D.C., chairman Bill Gates and president Steve Ballmer said Monday.The computer software giant was previously organized to meet the needs of today "but not those of the next decade," Ballmer said.
The essence of the change is the formation of two divisions and three groups, each with more independence and working in parallel fashion to provide customers something closer to one-stop shopping.
Gates said the move was driven by competitive pressure and an expansion of the company's original vision of a computer on every desk and in every home.
The change will be largely invisible to computer users in the short run, except for "a little extra zing in our step, a little extra assist, some new ideas, some new thoughts," Ballmer said.
The move also should have no effect on overall employment, the executives said. Slightly less than half of Microsoft's work force may be in line for some change in responsibility or job structure.
The antitrust case was irrelevant to the move, they insisted.
"There's no relation whatsoever," Gates said. "It has nothing to do with any lawsuits."
Nor does the move indicate the type of breakup Microsoft would accept in settlement negotiations that resume this week, Ballmer said
"We still see a lot of synergy in what we are doing across these divisions," he said. "There's certainly no breakup of this company into smaller companies that I would find acceptable, and we're certainly not in any way thinking of that as a possibility."
Scott McAdams, an analyst at McAdams Wright Ragen in Seattle, said the overhaul seemed to be designed to meet competition in operating systems for servers and non-desktop devices, especially in the hand-held market, than because of any antitrust considerations.
"They reorganize this thing every couple of years," McAdams said. "They keep trying to tweak it and realign their business strategy with the changing technology and the market."
New groups within Microsoft under the reorganization are:
-- Business and Enterprise Division, which will focus on software for information technology customers.
-- Consumer Windows Division, which will focus on developing Windows for the consumer.
-- Business Productivity Group, which will focus on products for "knowledge" workers.
-- Developer Group, which will focus on software developers. It will be led by Paul Maritz, who has overseen nearly all software development at the company.
-- Consumer and Commerce Group, which includes the Microsoft Network, will focus on bringing together consumers and businesses online. The division will be jointly headed by Brad Chase, a top marketing manager who masterminded the launch of Windows 95 and Internet Explorer, and Jon DeVaan, who has overseen development of Microsoft Office.
The divisions will manage their own internal functions, but may share some planning and marketing efforts.
Microsoft also created a home and retail products division to operate outside the core business divisions and focus on consumer-oriented products such as games, input devices and reference products.