Executives face big challenge in Windows unit

Microsoft has shifted one of its rising star executives from Office to Windows as part of a reorganization that's intended to unmuddle its sprawling Platforms & Services Division, the group that houses its Windows operation.

But some observers questioned whether the changes announced Thursday are deep and broad enough to avoid another debacle like the delays of Windows Vista, a project whose scale and complexity pushed Microsoft's development process to its limit.

The company's search for the next winning formula is more than palace intrigue.

Microsoft remains the world's biggest software factory. It's building some of mankind's most complicated technology and, for better or worse, much of the tech industry revolves around its products and shipping schedules.

Future versions of Windows will now be led by Office Senior Vice President Steven Sinofsky, a former technical assistant to Chairman Bill Gates who shares credit for pushing Microsoft to embrace the Internet in 1994.

Sinofsky, 40, is heading a new Windows and Windows Live group, one of eight units created in a realignment of the platforms group announced by Co-President Kevin Johnson.

"Steven stepping in to run that engineering-development function is very, very important," said Johnson said. "Steven is one of the most talented engineering leaders in the world, and I'm delighted to have him in this particular role."

Sinofsky also has a reputation for delivering products on time, something the Windows group has struggled with recently. It announced Tuesday the new operating system Vista won't be broadly available until January, the latest in a series of delays for a product now more than two years late.

"No product at Microsoft has a better on-time record than Office," said Jon DeVaan, senior vice president of engineering excellence and Sinofsky's former boss in the Office group.

"Steven's one of the best people at the company at understanding how to get groups to work together and go in one direction and create an integrated product," DeVaan said. "That's a skill that will improve the Windows group, particularly when you look at Windows and Windows Live together. Those are two groups that are going to have to work together."

Sinofsky has a good reputation but faces a huge challenge as an outsider of sorts, coming in to lead a vast organization that needs drastic changes, said Michael Cusumano, a Massachusetts Institute of Technology management professor who has studied Microsoft for years.

Cusumano thinks Microsoft should heavily prune the Windows group and the Windows product, because both have become too big and complex.

Problems getting Vista done have already forced Microsoft to change its development process and cut major features after a 2004 reassessment.

"Three years from now or two years from now, there's still going to be the same mess. It's still too big, too complicated, too many people," Cusumano said. "Until they solve that fundamental problem, the best managers in the world are still not going to get Windows to ship on time."

Microsoft leadership also needs to put more emphasis on "the discipline of meeting deadlines, which is probably considered to be a second- or third-order problem on the Windows team, compared to excellence or perfection," said Mark Anderson, a Friday Harbor technology commentator and consultant.

"I think it's a decision that has to be made at the top: Is a date more important or the engineering ideas more important?" he said. "In a situation like Microsoft's in, it's got to be about the date."

Anderson speculated that the reorganization is also sending a message to partner companies furious about Vista delays that may cost the industry "billions." "So many people have been hurt by this current delay that if you didn't do some kind of reorg, the industry would come down your throat," he said.

Chief Executive Steve Ballmer also emphasizes accountability, but with Microsoft's committee-driven management approach it's hard to pinpoint responsibility. It's also unclear whether the reorganization will satisfy critics inside and outside the company.

Jim Allchin, the co-president of the platforms division who led Windows through Vista's development, already has announced he's retiring at the end of the year.

Anderson questioned how Bill Gates factors into the situation, since he's chief software architect and Windows "is his most important product."

"Are you going to fire Bill?" Anderson said. "I don't think so, but he is responsible for this."

Johnson emphasized the changes aren't about problems with Vista as much as preparing for the next round of products. "From my standpoint, I step in and say this has nothing to do with the past and everything to do with the future."

The reorganization was announced Thursday morning. Microsoft stock slipped 30 cents to close at $26.35

Johnson said he's been working toward the changes since September, when he was moved from sales chief to co-president of the platforms division, in preparation for Allchin's retirement. He interviewed hundreds of employees and held a leadership retreat in January to chart the changes.

"My job is to make sure we have the leadership team and structure in place to support the great wave of products and innovation we have coming in the future," he said.

Goals of the reorganization are to aid the new emphasis on Web services announced in November, focus on key growth opportunities and give the group more agility by reducing layers of management, Johnson said.

The new units also divide business development, marketing and engineering functions previously aligned more with product groups.

In particular, the changes redistribute engineering, marketing and market-development functions clustered in the Windows client PC group headed by Senior Vice President Will Poole. He will now lead a new market-expansion group focusing on emerging markets and new types of PCs.

Windows client-marketing Vice President Mike Sievert now runs a standalone group, reporting to Johnson rather than Poole. The eHome division that developed Media Center versions of Windows was moved to the company's Entertainment and Devices division that houses Xbox and TV software.

Other units are roughly the same as before, but some have different names. Vice President Blake Irving's MSN platform unit is now the Windows Live platform group, and MSN Senior Vice President David Cole's group is now called the online business group.

Yusuf Mehdi, another MSN senior vice president, is moving from the product group and will report to Johnson as chief advertising strategist. Martin Taylor, who worked on anti-Linux strategy, will work for Cole as vice president of Windows Live and MSN marketing.

Johnson is also reassigning Mike Nash, security-business vice president, to an undetermined role, replacing him with Ben Fathi from the server team.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com. Contributor to Tech Tracks, seattletimes.com/techtracks.