By Rob Helm [Bio]
Posted: Jul. 15, 2002

Microsoft's organization still shows gaps left by the Apr. 2002 departure of President and Chief Operating Officer Rick Belluzzo. While senior executives such as Jeff Raikes have taken over some of Belluzzo's responsibilities, the company's hands-on CEO, Steve Ballmer, still has a direct line to many product groups and directly supervises operations groups (such as human resources and finance). This article outlines the changes the company has made—and has not made—at the vice-presidential level and above since the publication of the Feb. 2002 Directions on Microsoft OrgChart. [All of the changes mentioned in this article are included in the latest Orgchart (see sample), which contains the name, title, reporting relationship, and job description for the top 900 executives.]

(For further information on Belluzzo's departure, see "President, COO Belluzzo to Resign" on page 23 of the May 2002 Update.)

The company has not made any sweeping organizational changes since Feb. 2002, and headcount in the upper reaches of the organization has declined slightly while the company as a whole has grown: there are now 121 executives ranking vice president or above, compared with 125 in Feb. 2002. Fourteen women hold the rank of vice president or above, compared with 11 in Feb. 2002.

Product Group Roles Expand Slightly

Product group leaders reporting to Ballmer were to receive greater responsibility in the wake of Belluzzo's departure. The leader who has gained the most is Productivity and Business Services Group Vice President Jeff Raikes. Most of the other moves in the product groups reflect local changes in strategy rather than any major shift of power.

Raikes Gains Licensing, Business Intelligence

Worldwide Licensing and Pricing Vice President Bill Landefeld, who formerly reported to Belluzzo, now reports to Jeff Raikes. Also joining Raikes's group is a new Business Intelligence Applications Group, headed by Lewis Levin, which will promote development of applications on business intelligence products such as SQL Server Analysis Services and the Microsoft Data Analyzer client. In the past few years, Levin has held several positions, including vice president of business applications (reporting to David Vaskevitch, senior vice president and chief technology officer for platform strategy and technology); vice president of Passport, Microsoft’s online identification and authentication technology; and CEO of TransPoint, the company’s online bill payment venture sold to CheckFree in early 2000.

Raikes also now directly supervises Alexandra Loeb's Tablet PC unit, which formerly reported to him through Dick Brass. Brass has moved out of Raikes's group and into the domain of Chief Software Architect Bill Gates. Brass will continue to supervise the company's efforts in electronic books (including its Reader and ClearType technologies) and automotive computing, but will now report to Gates lieutenant Craig Mundie rather than Raikes.

Raikes has handed over one responsibility: Ted Johnson and his Business Tools Division (which includes Visio, Project, and MapPoint) will now report to Raikes indirectly through Office Senior Vice President Steve Sinofsky, rather than directly.

One new vice president, Bill Pollie, has joined the Business Solutions Group headed by Raikes lieutenant (and former Great Plains CEO) Doug Burgum. Pollie will be responsible for the group's North American sales and business solutions, reporting to Jeff Young.

Tools, Security, Management Get New Leaders

Several senior executives have moved within the Platforms Group, headed by Group Vice President Jim Allchin, who manages development of Windows, server applications, developer tools, management products and technology, and technical content development and delivery.

Vice President Yuval Neeman has left the Developer and Platform Evangelism Division of Senior Vice President Eric Rudder, who reports to Allchin. Neeman will manage design and development in the storage business unit of Senior Vice President Bob Muglia, who also reports to Allchin. The Visual Studio and .NET platform development groups that reported to Neeman now report directly to Rudder.

In the Windows Division of Senior Vice President Brian Valentine's (another Allchin subordinate), Mike Nash has taken the reins of a new security business unit which will oversee the company's Internet Security and Acceleration Server (ISA) firewall product, as well as the planned TrustBridge security gateway project. (See "TrustBridge to Simplify Resource Sharing" in the Aug. 2000 Update and "Security Coding Halt, New Hires" on page 6 of the Mar. 2002 Update.) Nash formerly reported to Eric Rudder as head of the Content Development and Delivery Group, responsible for all the company's developer and user education efforts.

In July, Valentine hired Kirill Tatarinov, the CTO of BMC Software and one of the founders of Patrol Software (acquired by BMC in 1994). Tatarinov replaces Deborah Black as corporate vice president of the Management Business Group, which develops Windows management features (such as Windows Management Instrumentation) and products such as Application Center Server, Operations Manager, and Systems Management Server. Black now reports directly to Allchin in an unspecified role.

MSN Adapts to .NET My Services Change

Two shifts inside the MSN and Personal Services Division (headed by Senior Vice President David Cole) seem to reflect the change in strategy for .NET My Services, the company's planned Internet-based data store for personal information, such as calendars and address books. (See "New Strategy Devised for .NET My Services" on page 20 of the Apr. 2002 Update.)

Vice President Christopher Payne, who was formerly responsible for .NET My Services marketing, will now lead the MSN.com portal. Payne will supervise development of MSN.com properties such as the MSN home page, CarPoint, HomeAdvisor, and MSNBC, as well as the design and implementation of a single content management platform for all MSN.com properties.

Vice President Lisa Brummel has moved out of David Cole's division to become vice president of home products and services under Vice President Mitch Koch, who reports to Senior Vice President Robert Bach. Brummel remains responsible for sales and marketing of Macintosh software and other non-entertainment products that target home users. However, those products no longer include subscription services built on .NET My Services and the .NET platform. Stephen Schiro, vice president of retail sales and marketing, will report to Brummel, rather than directly to Koch as he did before.

Mobile, TV Under Ballmer

Two leaders of strategic businesses targeting non-PC devices now report directly to Ballmer.

Vice President Pieter Knook takes over marketing and sales efforts for wireless carriers, in addition to his previous responsibilities for targeting ISPs and telcos. (See "Intel, TI Push Smartphone" on page 19 of the Apr. 2002 Update.) Knook formerly reported to Group Vice President Orlando Ayala, head of the company's sales organization. Reporting to Knook is Vice President Juha Christensen, whose Mobility Group handles strategy, business development, and marketing for mobile products such as the Pocket PC and Smartphone 2002. Also reporting to Knook is General Manager Kevin Shields, responsible for development of mobile devices and synchronization software. Shields takes over the role of Mobile Devices Division Vice President Ben Waldman, who has taken a year's leave and plans to return to the company in an as-yet-undetermined role.

Also reporting directly to Ballmer is Vice President Moshe Lichtman's TV Division, formerly headed by Jon DeVaan. DeVaan has taken a leave of absence, and Bruce Leak, the former president of WebTV Networks, now has an unspecified role under MSN Personal Services and Business Vice President Yusuf Mehdi. The TV Division, which formerly reported to Belluzzo, is in the midst of a major change in focus toward simpler devices and software. (See "TV Division: Back to Basics" on page 22 of the June 2002 Update.)

New World Gets New Leader

In the sales divisions under Group Vice President Orlando Ayala, the largest change is an expanded role for Kevin Johnson in the Americas.

Johnson Takes North America

Senior Vice President Kevin Johnson has been placed in charge of the Americas. Formerly head of the U.S. sales organization, Johnson will now supervise that region as well as Mauricio Santillan Razo, who heads the Latin America region. Bob Clough's small and medium business sales and marketing unit, and Paul Bazley's U.S. Enterprise Group will now report to Johnson lieutenant Andrew Lees, who is vice president of U.S. subsidiary marketing, sales, and partnering. Clough and Bazley formerly reported directly to Johnson.

Joining Johnson's group is Allison Watson, the new vice president of worldwide partner sales and marketing. Formerly general manager of the Mid-Atlantic region, Watson will take on the partnering responsibilities of Rosa Maria Garcia, who has become general manager of the company's Spain subsidiary. Watson will report to Lindsay Sparks, vice president, Small and Medium Business.

Also in the U.S., Peter Boit has been named vice president, Western region, replacing Richard Kaplan. Kaplan has taken over the Content Development and Delivery Group role vacated by Mike Nash (as explained earlier). U.S. Leadership Initiatives Vice President Dianne Gregg has left the company.

New Strategy Head in Europe, Marketing Chief in Asia

The head of the Europe, Middle East, and Africa (EMEA) region, Senior Vice President Jean-Philippe Courtois, will directly manage Vice President Patrick De Smedt and the other region heads formerly reporting to Vice President Umberto Paolucci. Paolucci will lead EMEA corporate and government strategy, replacing the departing vice president, Richard Roy.

Michael Rawding, president of the Asia-Pacific and Japan region, gains a new vice president of sales and marketing, Chris Atkinson, who formerly led the .NET Enterprise Server Solutions Group.

Company's Fate in Ballmer's Hands

The operations divisions that oversee Microsoft's day-to-day business have changed little since Belluzzo's departure. Most groups that reported to Belluzzo now report directly to Steve Ballmer, with two exceptions: Bill Landefeld's worldwide licensing and pricing unit (which reports to Raikes, as explained earlier), and Bill Norman's worldwide operations unit, which now reports to Vice President Rick Devenuti of the Information Technology Group.

An important change in the legal arena is that longtime general counsel William Neukom has passed the torch to Senior Vice President Brad Smith. Neukom leaves at a time when the Department of Justice antitrust lawsuit has ceased to threaten the company's existence, and the host of private antitrust suits that have replaced it present ongoing annoyances rather than major threats.

Legal is just one of the formidable array of responsibilities still in the hands of Microsoft's chief executive: Ballmer has 16 direct reports, and oversees all operations divisions (legal, human resources, finance, corporate development, and corporate marketing), sales, and six product groups. Although he is known for his formidable grasp of detail, Ballmer is likely to consolidate at least some of the operations divisions under a subordinate, but locating a person to fill that role will take some time. Historically, the number-three position at Microsoft has proven difficult to fill, in part because the person in that role must accept that he or she has little chance of leading the company until Gates or Ballmer retires.