By Rob Helm [bio]
Posted: Feb. 6, 2006

• Illustration: Support and Sales Changes, Feb. 2005

The following is the full text of an article published by Directions on Microsoft, an independent research firm focused exclusively on Microsoft strategy & technology. More samples of our content, as well as a list of upcoming articles and reports are also available.

A shift in customer service management, a new leader for OEM sales, and an expanded large-account sales strategy unit headline recent changes to Microsoft's corporate organization. Many changes reflect continued efforts to beef up sales to large customers and move into more proactive support and services. In addition, the team in charge of Microsoft's e-mail server, Exchange, has been merged with the team currently overseeing the company's instant messaging (IM) and presence platform, Live Communications Server.

(For an overview of changes to Microsoft's support and sales organizations, see the illustration "Support and Sales Changes, Feb. 2005".)

This report outlines recent changes at the vice-presidential level and above; for the latest details, see the Mar. 2006 Directions on Microsoft OrgChart.

Services and Support: Bigger Role for Hogan

Organizational changes in the Worldwide Services and IT organization affect the following executives:

Kathleen Hogan has taken over responsibility for much of Microsoft's Customer Service and Support (CSS) organization from its longtime leader, Vice President Lori Moore. Now vice president of Customer Support and Customer Partner Experience, Hogan will add oversight of all of the regional customer support teams, Premier Support, and consumer support to the support strategy initiatives she supervised previously. She will report to Worldwide Services Vice President Rick Devenuti instead of Chief Operating Officer (COO) Kevin Turner. Hogan, formerly of the management consulting firm McKinsey and Company, joined Microsoft in 2003 to supervise customer and partner satisfaction initiatives, which included the launch of an employee bonus program tied to customer and partner satisfaction scores.

Lori Moore, who has headed CSS since 2000, still retains responsibility for global outsourcing and some other customer service functions as vice president of Customer Service. She continues to report to Devenuti.

Ron Markezich has been named vice president of Managed Solutions in addition to his current role as CIO. Still responsible for Microsoft's IT infrastructure, Markezich will now lead the launch of the company's planned solutions for customer desktop deployment, patch management, asset management, and user support, currently being tested at Energizer Holdings and other customer sites. In this role he replaces Lindsay Sparks, who remains with the company but whose new job has not been announced.

Sales and Marketing: Expanded Enterprise Sales, New OEM Chief

Microsoft's teams in charge of sales to large corporate customers and computer manufacturers have new leadership, as follows:

Barbara Gordon has been promoted to vice president of Enterprise Sales, from vice president of Global Accounts. Gordon gains the company's new Segment of One program, which focuses on sales to the company's largest customers. Her promotion comes at a time when Microsoft is expanding its enterprise sales force in many parts of the world, hoping to reduce the number of accounts per salesperson and increase industry-specific expertise.

Kim Daly will replace Gordon as vice president of Global Accounts, overseeing sales of Microsoft products and services to approximately 50 of the world's largest multinational organizations. Daly has previous experience in the company's OEM Operations group and in telecomm sales in the Europe, Middle East, and Africa (EMEA) region.

Scott Di Valerio takes over as vice president of OEM Sales & Marketing, replacing Rodrigo Costa, who has left the company. Di Valerio's top challenges include getting PC manufacturers to build computers that will run Windows Vista, the new client OS due for release this year, and improving the company's revenue-per-PC in the consumer segment. Di Valerio is already well known to investors as Microsoft's chief accounting officer and spokesman in quarterly earnings calls; his replacement in that role has not yet been named.

Other Changes in Sales and Marketing

Some notable changes in the field sales force include the following:

Pierre Liautaud has been named vice president, Western Europe, where he will track most of the company's Western European subsidiaries, excluding the United Kingdom, France, and Germany. Filling in for Liautaud as vice president of the Enterprise and Partner Group (EPG) for the EMEA region is Niels Soelberg, who has served as senior director of EPG in Central Southern Europe and as regional services director for Northern Europe.

Phil Sorgen has been named president of the Microsoft Canada subsidiary. Sorgen previously was general manager of U.S. Enterprise Sales Operations. He replaces David Hemler, whose new job has not been announced.

Hernan Rincon has been promoted from regional director to vice president of EPG Latin America.

Changes of note in the company's specialized sales and marketing departments include the following:

Joanne Bradford has been promoted to vice president of MSN Global Sales and Marketing, from vice president of MSN U.S. Sales. Among other responsibilities, she will oversee ad sales for the new Windows Live and Office Live online services, as well as Xbox Live and Internet Protocol television (IPTV). She replaces Jane Boulware, who is now vice president and chief of staff in Microsoft's central marketing group, which handles companywide marketing and branding.

Kimberly Till has left the company and her post as vice president, Worldwide Media and Entertainment. Till was responsible for sales to large media and entertainment companies, a task which might now fall to Vice President Blair Westlake and the recently reorganized Entertainment and Devices division.

Kurt Kolb has been promoted to vice president of System Builder and License Compliance, from his previous role as general manager of System Builders. Kolb continues to oversee the company's relationships with smaller PC builders, which is contained in a completely different part of Microsoft's organization (the Business Division headed by Jeff Raikes) from OEM sales and marketing (which is in the sales and operations organization headed by COO Turner).

Product Groups: Exchange Merges with IM and Voice

The most notable change in the product groups is that the Exchange unit, which is responsible for development of Microsoft's e-mail and collaboration product, has become part of the new Unified Communications Group (UCG), which will also include the company's Real-Time Collaboration (RTC) unit, responsible for developing Live Communications Server instant messaging (IM) and presence platforms.

Anoop Gupta will be the vice president of UCG, where he will be responsible for all of the company's corporate e-mail, voice, and IM products. Development of voice mail and other voice functions to Exchange was previously separate from the RTC group's efforts to add voice and telephony to Live Communications Server. The move also puts Exchange in the same division as Outlook, the most widely used client for Exchange, which might simplify strategic planning for the two products.

Dave Thompson, vice president of Exchange, will report to Gupta instead of to Windows Server System Senior Vice President Paul Flessner.

Other Product Group Changes

Microsoft has added a new set of chief financial officers (CFOs) for the three major business divisions created in a Sept. 2005 reorganization. Each divisional CFO will be responsible for financial reporting and business management for one of the company's three divisions. These divisions include several of Microsoft's publicly reported business segments: Windows Client, Information Worker, Server and Tools, Home and Entertainment, MSN, Business Solutions, and Mobile and Embedded Devices.

The divisional CFO lineup is as follows:

Brent Callinicos is CFO of Platforms and Services, a division which includes the company's Windows Client, Server and Tools, and MSN segments. Callinicos retains responsibility for the company's worldwide licensing and pricing strategy, a job he took after leaving the company's corporate treasurer slot.

Peter Klein has been named CFO of the Business Division, which includes the Information Worker segment (covering products such as Office, Exchange, and Live Communications Server) as well as the Business Solutions segment, which covers the Dynamics business application line. Klein was formerly CFO of the Server and Tools segment.

Bryan Lee continues to fill the CFO role for the Entertainment and Devices division (which includes the company's Home and Entertainment and Mobile and Embedded segments), although he also is vice president of Entertainment and responsible for Microsoft's efforts in music, film, and television (such as TV delivery over the Internet).

Microsoft has no plans to change the way it reports financial results, and some of the seven segments retain their own CFOs. For example, Craig Bruya continues to serve as CFO for the Business Solutions segment, Bruce Jaffe as CFO for the MSN segment, and Melvin Flowers as CFO for the Mobile and Embedded Segment.

Other shifts in the product groups include the following:

Joe Peterson has been named vice president of Windows Online. He was previously vice president of the Windows Client Core Platform unit, responsible for the desktop shell, Internet Explorer, and graphics and printing technologies. In his new job he supervises the Windows Genuine Advantage program, which offers free downloads to customers who validate their Windows licenses online, and he could have a broader role creating online services that complement current versions of Windows.

Ya-Qin Zhang has returned to Microsoft Research as vice president of Research and Development, China. He was previously vice president of Mobile and Embedded Products, responsible for Windows CE and mobile device software development now supervised by Vice President Todd Warren. Zhang is returning to familiar territory, having previously served as managing director for Microsoft Research in China.

Gordon Mangione has left Microsoft and his role as vice president of Security Products, where he supervised the development of Internet Security and Acceleration (ISA) Server and other security products. Filling in for him will be Ted Kummert, vice president of Enterprise Access and Security Products, and Avi Nathan, general manager of the Haifa, Israel, research and development center where much ISA Server work is done. Before joining the security team, Mangione had overseen much of the development of SQL Server 2005.

Bill Landefeld, formerly vice president of Business Solutions Operations, has left Microsoft. Landefeld was responsible for integration and efficiency initiatives in the Business Solutions sales and marketing teams. His responsibilities currently fall to his former supervisor, CFO of Business Solutions Craig Bruya.

Operations Groups

Several executive-level changes affect Microsoft's operations groups.

Brian Roberts, Microsoft's longtime Corporate Development vice president, who was in charge of mergers and acquisitions, has left the company and joined the venture capital firm Evercore Partners. Replacing Roberts is Senior Director Marc Brown. Microsoft Chief Financial Officer Chris Liddell, who joined the company with considerable mergers and acquisitions experience, will also probably play a larger role.

Hank Vigil has been promoted from vice president to senior vice president, Consumer Strategy and Partnerships; he will continue to develop partnerships with broadband providers, media companies, and consumer electronics firms.

Lisa Brummel, the company's head of human resources, has been promoted to senior vice president.

Frank Holland has been named vice president of Operations, reporting to Chief Operating Officer Kevin Turner. Formerly general manager of OEM Operations, Holland will now be responsible for the company's order-to-cash processes, ranging from order entry to cash receipt and including manufacturing, distribution, and antipiracy.

Resources

For a diagram of the top 750 Microsoft executives, see the Mar. 2006 Directions on Microsoft OrgChart, available both as a hard-copy poster and online.

Recent high-level reorganizations were outlined in "Bach to Oversee Entertainment Strategy" on page 20 of the Feb. 2006 Update and "Allchin's Retirement Sparks Reorganization" on page 43 of the Nov. 2005 Update.