Microsoft reorganization leaves federal group intact, official says

Microsoft Corp. announced last week it has finished an internal reorganization,
breaking into five new units: the business and enterprise division, consumer Windows
division, business productivity group, developer group, and consumer and commerce group.

Microsoft’s federal interests will fold entirely into the business and enterprise
group, so contacts for federal customers will be unchanged, Microsoft federal spokesman
Keith Hodson said.

Business and enterprise is “our corporate information technology group,”
Hodson said. For example, this group will produce Windows 2000 and compete against Solaris
maker SunSoft, he said.

Some industry watchers speculate that the reorganization is a pre-emptive strike,
intended to fend off a possible Justice Department order to break Microsoft into so-called
Baby Bills. Hodson denied this perception.

“Software is going to play a far broader role in our lives than we can even
imagine today,” Microsoft president Steve Ballmer said. The reorganization was a
response to a need to “update and refresh our vision,” he said.

The main catalyst for the reorganization, Hodson said, was the company’s decision
to focus on electronic commerce. The company is “really turning the boat
around,” he said, likening the move to that of “a few years ago when Microsoft
decided to get into the Internet business.”

The structure as it was had become too bureaucratic, he said.

Too many decisions were being deferred to Steve Ballmer and Bill Gates, communication
between divisions was taking too long, and there was too much duplication of efforts,
Hodson said.

He called the reorganization major. “Some heads rolled; some people got elevated;
some got demoted,” he said. 

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