Windows Azure users, be afraid of Microsoft's shake-up

There's no sign that innovation will accelerate -- but a real risk Azure will lose momentum as reorg chases out employees

Microsoft is changing -- or at least reorganizing. In my experience, a company reorganizes when it isn't doing well, so it plays three-card monte in front of the press to distract from those woes. In the end, a reorg typically makes no changes to the culture, solves no problems, and confuses and disenchants both employees and customers. But it's a trick that public companies play all the time.

In Microsoft's reorg, who gets Windows Azure? The winner: Satya Nadella. As CITEworld's Matt Rosoff notes, "Nadella has been running Microsoft's fastest-growing business unit, Server and Tools, since 2011, when longtime veteran Bob Muglia left. Before that, he oversaw Bing engineering and tools and services for small businesses. He now runs back-end development and engineering for services, including Microsoft's data center, and retains control of the Azure business."

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If you're a so-called Microsoft shop and/or have moved to Azure, you should be concerned by the reorg for a few reasons.

First, it does not appear that the level of innovation will rise at Microsoft, specifically around its PaaS and IaaS offerings. Microsoft has been playing follow the leader -- specifically, Amazon Web Services, which is right down the street from Microsoft's campus -- when Microsoft really should be innovating to be the leader. However, doing so takes creativity, an attribute Microsoft has been lacking. (Look no further than the Surface for proof.)

Second, it takes months, sometimes years to recover from reorgs, even good ones, in terms of realigning the resources to be most effective. I suspect there will be a ton of resignations at Microsoft three to six months after the reorg is complete, with many Azure staff members finding their way to Amazon Web Services (which is hiring). Product-delivery issues will result, affecting Azure features and updates.

Azure needs some TLC if it wants to hold its position in the market. Many enterprises need Azure to succeed, which means many need Microsoft as a whole to succeed. Will Azure get the innovation and attention it requires? That's not clear. What's clear is that it's not the Microsoft I knew in the 1990s.

This article, "Windows Azure users, be afraid of Microsoft's shake-up," originally appeared at Read more of David Linthicum's Cloud Computing blog and track the latest developments in cloud computing at For the latest business technology news, follow on Twitter.


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