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Marketplace Morning Report

Why does Microsoft need a restructuring?

Molly Wood Jul 11, 2013
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It’s been five years since the last big leadership shake-up at Microsoft. That’s eons in the high tech industry, but in an email to employees today CEO Steve Ballmer announced “a far-reaching realignment of the company” with fewer product divisions to make the software giant a more nimble innovator.

In short, the world’s largest software company wants to make more stuff you can hold in your hand to surf the web.  Think cell phones and its new Surface tablet.

“The industry is changing. There’s not enough money in the Operating System to make a viable company,” explains tech industry analyst Patrick Moorhead.

He says even Windows isn’t safe with Google’s Android gunning for the PC. “They’re on that trajectory, which poses a very large threat to Microsoft.”

Ballmer has said he wants to refocus Microsoft on devices, like mobile products, and services like cloud computing.

At Dartmouth’s Tuck School of Business, Professor Sydney Finkelstein says he wouldn’t call those changes radical, but he adds “moving people out of comfort zones is good thing, forces them to stop thinking about the same things in the same way.”  

Finkelstein sees irony in where the high tech executive turned for ideas – Detroit.  Ballmer has been getting transformation tips from Alan Mulally, the CEO of Ford.

This story has been updated with the latest information.

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