Of course, major restructurings and reorganizations are common among large IT vendors, and often the plans end up being so convoluted and hard to implement that they do more damage than good. Sometimes the plans slow down the company or simply prove outright unwise, leading down a path of failure.
An unwanted byproduct can always be that enterprise customers and employees interpret these shakeups as signs that the vendor is in crisis and rudderless, leading them to lose confidence in the companies. Customers then begin to second-guess their decisions to invest in the vendor's products, while employee morale dips and staff turnover increases.
David Johnson, a Forrester Research analyst, said that Microsoft's internal divisions are getting in the way of its progress. The division leaders are judged on the financial performance of their business unit, but also on potentially conflicting goals including product integration, quality and shared financial results.
"It can be extremely complex to track progress and success and failure across a confusing organizational structure and set of priorities, and divisional revenue will always trump other goals, so when the pressure is on for revenue or profits in one division, it can be difficult or impossible to get collaborative, cross-silo work done," Johnson said via email.
The potential upside is that, given the company's enormous capabilities and resources, Microsoft could speed by competitors and blaze a trail of innovation if its inner workings were properly coordinated, he said.
"The best purpose of a large company is the ability to coordinate resources and talents across a large number of things, to get a few very important things done," Johnson said.
"But the way they're structured now, they can innovate but only in silos or pockets, and so they're not bringing the full potential of a well-coordinated, large organization to get that handful of really important, high-value things done," he added.
Johnson expects a more prominent role will be given to Nadella and to the software-development-tools line of products.
"Microsoft's best work is when they give people development tools that are so easy to use for incredibly powerful things, that they will commit themselves and careers to mastery of them," he said.
That was the case with Visual Studio early on, and with Visual Basic for Applications with Excel, according to Johnson.
"Microsoft democratizes software development by lowering the barriers to entry like no other company. This is a part of their DNA and culture I'd like to see come back. The shift to cloud gives them the change to do it again, and I was blown away by the improvements I saw with Visual Studio 2013 at BUILD in San Francisco," he said, referring to the recently concluded Microsoft conference for developers.
Johnson is also betting on the consolidation in a single Windows division for PCs, tablets, smartphones, and even wearable devices.
"Microsoft needs to unify the experience across all devices, and stop treating them as separate businesses with separate priorities and revenue goals," he said.
This reorganization would also give Ballmer a good chance to tear down the notorious stack ranking system that Vanity Fair magazine detailed in a devastating article a year ago.
That story, titled "Microsoft's Downfall: Inside the Executive E-mails and Cannibalistic Culture That Felled a Tech Giant," described this annual review system, which forces team leaders to give glowing, fair and bad reviews to a pre-determined percentage of their employees, even if it just so happens that on a given team everybody delivered good and excellent performances.