"Steve doesn't have to be involved in setting those goals -- he doesn't have to broker the conversations between the different product group leaders," Schadler said. "He can leave that to the presidents. It's a much more autonomous business unit structure."
Though Schadler did not think the inclusion of MSN into the new Platform Products & Services Division was as logical as the rest of the new structure, a Microsoft spokesman said it fits in with the company's plan to depend less on selling packaged software and provide more services for customers.
MSN is increasingly becoming the division where Microsoft creates innovative service offerings, so it makes sense for that business to be alongside Windows and other pieces of server software that will become more of a services infrastructure than separate products, said Tom Pilla, a corporate communications representative at Microsoft.
"Customers want a seamless experience," Pilla said. "The line is going to be blurring between static bits and always-on services. This is how we’re positioning the company to take on that challenge going forward."
Dan Kusnetzky, vice president of system software research at research firm IDC, said Microsoft has been moving in the direction of providing a more services-oriented revenue model for some time. "Microsoft has been working for a number of years to move from a packaged product thinking to thinking about software as a service [customers] pay for in perpetuity," he said.
However, Kusnetzky cautioned that Microsoft could alienate some customers because they have traditionally forced people to buy into the services model rather than clearly outlined the benefits of it to them, and "most people get upset when they are forced in a direction they don't understand."
That was evident just last week when Microsoft said it would require enterprise customers of Windows Vista to purchase its Software Assurance contract, a move that drew fire from customers who felt like they were being made to pay for something they may not use.