Revenge of the nerds: Microsoft reorg bodes well for the techies

Terry Myerson gets the promotion that eluded Steve Sinofsky, and Scott Guthrie's move up starts the Salesforce rumors swirling again

Revenge of the nerds: Microsoft reorg bodes well for the techies
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Microsoft's executive ranks historically have drawn from two very different gene pools: The techies and the marketeers. Yesterday's reorg shows that techies are once again on the rise.

The memo from Satya Nadella announcing the reorg states, in short, that Windows honcho Terry Myerson is taking on Microsoft's ill-fated Nokia/Lumia efforts in addition to all the devices side of the business -- Xbox (which Myerson was already in charge of), Surface, HoloLens, and all of the hardware Microsoft's been peddling for decades.

Scott Guthrie, better known to developers as ScottGu, had his Cloud and Enterprise bailiwick extended, picking up the Microsoft Dynamics business. With all the on-again off-again rumors swirling around Microsoft's possible acquisition of Dynamics competitor Salesforce, this re-alignment starts the rumors going again.

It's hard to say which move is more astounding.

Myerson landed the promotion that Steve Sinofsky never got. Sinofsky abruptly left the company two and a half years ago, just as Microsoft released Windows 8. Many people -- present company included -- attributed his departure to a dispute over his future at Microsoft, which included designs on absorbing the pre-Nokia-purchase mobile effort. Now, with Windows 10 six weeks away, Myerson's not only received the keys to the Nokia/Lumia washroom (likely Microsoft's worst albatross), he's pulled in all of the hardware pieces that Sinofsky never acquired -- Surface, Xbox, and the future of Microsoft's hardware efforts.

Guthrie, on the other hand, is taking over a huge Microsoft business that's long been in organizational isolation. Keep in mind that 18 months ago Guthrie was in charge of server and tools under Nadella. Now he's in charge of all of Microsoft's cloud efforts, including the awkward-duckling CRM organization.

As a direct result of the ascendency of both techie domains, two long-standing marketing types (and I say that with all due respect) have hit the road.

Stephen Elop, former director of consulting for Lotus, CIO of Boston Chicken, former head of the Office effort under Steve Ballmer, then CEO of Nokia, then head of the devices part of Devices and Services under Ballmer and Nadella, "agreed that now is the right time for him to retire from Microsoft."

Tom Warren at The Verge reports that Elop's No. 2, Jo Harlow, is also leaving Microsoft.

Kirill Tatarinov has long maintained a low profile. He started at Microsoft in 2002, coming from a software management background with a company called Patrol Software. He worked on Small Business Server at Microsoft and led the System Center effort before switching to Dynamics in 2007. Tatarinov will "explore what's next for him."

There were other announcements.

Eric Rudder, who is widely admired for his technical chops all the way back to Visual FoxPro 3, has finally left for good. His few operational responsibilities fall to Qi Lu and Lu's Applications and Services group.

Mark Penn, who will forever be cast in my mind as the creator of the Scroogled ad campaign, is also packing it up. He and Ballmer have formed a venture firm called The Stagwell Group with $250 million in capital. (I'll never understand why Nadella gave the go-ahead for the Scroogled ads, but apparently being a $250 million buddy with Microsoft's largest single shareholder doth have its privilege.)

Where is this all headed? Hard to say. But I don't think Microsoft's going to get out of the phone business, much as Nadella may want to. (Remember, the Nokia purchase was thrust upon him as a Ballmer departing gift.) Perhaps there's renewed resolve to turn out higher-end phones and phablets, although heaven only knows how they could be well received -- or even differentiated -- in the current market. Windows 10 Mobile sounds nice in theory, but it's hardly enough to push Lumia to the forefront.

Most of all, I believe Microsoft's mobile hardware effort will turn into a Proof of Concept for Windows features. (Hey, that's how Microsoft got into the mouse business years ago.) You could look at Surface as a PoC that took several tries to get right.

It's entirely possible that Nadella has new directions in mind for Dynamics. Looking at it from a techie point of view, Dynamics is a giant app that loves the cloud. Perhaps there's room to absorb Salesforce? Or maybe Microsoft could focus on building and selling the plumbing, and letting the apps duke it out in the marketplace.

But whatever the results, it's a good day for those of us who long to see great products again from the folks in Redmond. Fingers crossed.

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