Microsoft's executive musical chairs takes a new twist

Satya Nadella officially names Scott Guthrie and Steven Elop as EVPs, makes interesting move with Xbox team under Phil Spencer

In an all-hands memo this morning, Microsoft CEO Satya Nadella made three appointments: Scott Guthrie, aka ScottGu and formerly interim head of the Cloud & Enterprise organization becomes Executive VP; Steven Elop officially nails the spot of EVP of the Devices group; and Phil Spencer, former head of Microsoft Studios, becomes the new head of Xbox, which includes Studios. The first two appointments were widely expected. The third packed a surprise, in that all of the Xbox effort -- including Xbox, Live, Music, Video and Studios -- now falls under Windows/OS group honcho Terry Myerson.

The "Executive VP" title means that Elop and Guthrie will be reporting directly to Nadella. In the brave new world of Microsoft "devices and services," they represent the future of, respectively, devices and services. Terry Myerson, EVP of operating systems, sits at the same level.

Two months ago, ScottGu was promoted from leading server and tools into the cloud and enterprise spot vacated by Nadella upon his promotion to CEO. Although speculation circulated at the time that ScottGu wasn't quite ready to fill Nadella's shoes -- thus the "acting" part of his title -- few people who know ScottGu doubted he would be able to excel in the new post. ScottGu has worked for Nadella for years.

Elop, of course, has been destined to head the "devices" part of Microsoft's devices and services reorientation ever since details of the Nokia deal emerged last September. The one wild card in that arrangement, Julie Larson-Green, moved from leading the devices unit to return to the engineering gene pool in February. Elop's poised to absorb 35,000 Nokia employees into the Microsoft ecosystem, likely next month.

Phil Spencer's appointment to lead the entire Xbox effort, including Studios, under Myerson took many observers (including this one) by surprise. Inside Microsoft, Xbox is a half-fish, half-fowl effort with significant feet in both the devices and operating systems sides of the Microsoft org chart. Placing all of Xbox under one person, and placing that one person under the OS spread, represents an interesting gamble at a time when Microsoft is falling behind Sony in console sales.

Xbox has had a tortured history at Microsoft since widely acclaimed Don Mattrick left last July. As a knee-jerk response, Ballmer named Julie Larson-Green to head of Xbox hardware and Studios, while giving Xbox software to Myerson. Marc Whitten was the Xbox product officer, but he resigned earlier this month.

Now it seems that the Xbox management musical chairs have at last settled in a thermodynamically stable arrangement. Perhaps Spencer's intimate involvement with popular Xbox games will reinvigorate the Studios team and draw more indie developers. Moreover, the arrangement of Xbox under the OS umbrella could be a hint that the Xbox One effort will turn more Windows-like (or even vice-versa).

It strikes me as strangely asymmetrical that Windows Phone hardware will fall under Elop, while Xbox hardware will fall under Myerson. Will the arrangement work? Hard to say.

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