• Illustration: Windows Client and Core Changes
• Illustration: Online Services Changes

Windows and online services will be under new management after a Mar. 2006 reorganization of the Platforms and Services group by Co-President Kevin Johnson, who will lead the group after the planned retirement of Co-President Jim Allchin. Most notably, Steven Sinofsky, the longtime leader of the Office team, will join the group and take over Windows client and Windows Live design. Sinofsky comes to Windows with an enviable record of predictable Office releases, but it's not clear that he or any other single manager can tackle the organizational problems that delayed Vista's release.

This article covers changes to the Platforms and Services organization at the vice-presidential level and above that resulted from the Mar. 2006 reorganization.

Sinofsky's New Role

Windows client development and related online services have been placed under Sinofsky, while the former Windows Client unit has been disbanded. (For an illustration of the changes, see "Windows Client and Core Changes".)

Steven Sinofsky has been named senior vice president, Windows and Windows Live Engineering. He will manage the design of the "Vienna" client, the Windows client release after Vista. Sinofsky will also work with Chief Technical Officer Ray Ozzie to help plan the next generation of online services as Microsoft moves to head off Google and Yahoo. Specifically, he will lead development desktop and Web search, desktop clients for Windows Live services, and consumer e-commerce services such as the Windows Live Expo (an online classified advertising service). All these services appear strategic not only as possible Windows features but also as new businesses for the Windows unit and competitive weapons against Google.

Sinofsky comes to the group from the Information Worker organization, where he has worked since 1994, leading Office program management, and then Office development as a whole, from Office 95 through Office 2003. Sinofsky originally joined Microsoft in 1989 and spent four years in the company's developer tools organization. He also served as Bill Gates's technical assistant.

In Office, Sinofsky maintained a steady stream of releases every two to three years, while expanding the business beyond the Office suite to profitable server products such as Project Server. In part, that record came through a conservative approach to integrating Microsoft technology; for example, Office 2007, due at roughly the same time as Windows Vista, integrates very little Vista technology. Avoiding dependencies on new technologies, especially technologies with uncertain schedules, like Vista, has helped Microsoft upgrade Office regularly.

However, it is unlikely that Sinofsky came in to save the Windows Vista project, as some have speculated, even though his appointment followed the announcement of another delay to Vista. (See "Next Windows, Office in 2007".) Instead, Sinofsky probably came on board because the design phase of Windows Vista has ended, freeing some of the product's design team to begin work on Vienna under their new manager.

The following executives now report into Sinofsky's organization.

Chris Jones, vice president of Windows Client Core Platform, reports to Sinofsky instead of Will Poole, former leader of the Windows Client Division. Jones remains responsible for overall design of the Windows Client components, such as Internet Explorer, Windows Mail (the successor to Outlook Express, an e-mail client included in Windows), and the user interface.

Amir Majidmehr, vice president of the Digital Media Division, reports to Jones instead of Poole.

Chris Payne, a vice president whose group develops the company's Web search platform, now reports to Sinofsky. He previously reported to Yusuf Mehdi, a longtime vice president of MSN who is taking on a new role.

Steve Liffick, vice president, Windows Live User Experience, whose group develops online services clients (such as MSN Messenger and the new Windows Live Mail desktop client) among other components of online services, now reports to Sinofsky. He previously reported to Blake Irving, who continues to lead the company's emerging Windows Live server platform and data centers.

Windows Client Division Disbanded

Will Poole's Windows Client division has effectively been disbanded. Poole's division formerly led Windows client design (now under Sinofsky) and had profit-and-loss responsibility for the Windows desktop business. Poole drove Microsoft's efforts to expand Windows consumer sales through digital photos, audio, and video, first as head of the company's digital media unit and subsequently as head of the Windows Client division. However, his tenure has also seen Apple take a commanding lead in digital media, garnering a 70% share of the portable player market and a 70% share of legal music downloads in Nov. 2005 according to NPD Techworld. Beginning with a Sept. 2005 reorganization, Microsoft has shifted more responsibility for its consumer strategy to Robbie Bach, president of the Entertainment and Devices division.

Poole will head a new Market Expansion Group which will explore ways to sell Windows into emerging markets through new products (such as the Windows XP Starter Edition), antipiracy, and low-cost devices.

In addition to the executives who are now part of Sinofsky's organization, several other executives who were formerly part of Poole's group have been reassigned, as follows:

Rick Thompson's Extended Platforms division, which oversaw new form factors for Windows PCs, has been disbanded. Thompson's new role in the company has not been announced.

Joe Peterson, whose Windows Online unit manages the Windows Genuine Advantage online downloads site for verified Windows customers, will report to Poole instead of Thompson.

Bill Mitchell, whose Mobile Platforms Division develops the Tablet PC and Smart Personal Object Technology platforms, will report to Poole instead of Thompson.

Joe Belfiore, whose eHome team supervises development of Windows television technology, such as the Windows XP Media Center user interface and Media Center Extender device technologies, has moved to the Entertainment and Devices division led by President Robbie Bach. Belfiore formerly reported to Thompson. As a result of the move, Bach now controls teams that have developed Microsoft's most important TV platforms: Media Center, the Microsoft TV Foundation Edition set-top software, and Microsoft IPTV platform.

G. Michael Sievert, vice president of Windows Client marketing, now reports directly to Johnson and Allchin instead of Poole.

Windows Core Still Focusing on Vista

Brian Valentine, senior vice president of the Windows Core Operating System division which develops the Windows core components (including the kernel) and networking elements, continues to report to Allchin and Johnson. Valentine will be primarily responsible for the difficult task of stabilizing Windows Vista in time for its planned Nov. 2006 release to volume licensing customers.

Ben Fathi has succeeded Mike Nash as head of the Security Technology Unit, which manages Windows core security technologies (such as access control mechanisms) as well as the Security Response Center that responds to security vulnerabilities. Fathi was formerly general manager, Core File Services, and was responsible for Windows file systems, remote file sharing protocols, and storage services. He will report to Valentine, as Nash did. Nash plans to return in another role after an extended sabbatical.

Online Services Leadership Changes

While Sinofsky is responsible for the next generation of the company's online services and integrating their client pieces with Vienna, the online services themselves will be under new management as two longtime leaders depart. (For an illustration of the changes in online services, see "Online Services Changes".)

David Cole, who led Microsoft's overall online services business and had profit-and-loss responsibility for the MSN business unit, will depart on sabbatical in Apr. 2006 and currently plans to return in another role.

Cole has run MSN since 2001, and brought the unit to profitability on the strength of online advertising growth and aggressive cost-cutting. However, MSN was unable to develop subscription offerings to replace the company's shrinking dial-up Internet access business, a problem faced by other Internet access providers such as AOL. In addition, MSN was slow to move into the lucrative area of paid search, which has become the major source of growth at Google and Yahoo (through its Overture subsidiary).

For the moment, profit-and-loss responsibility for MSN and Windows Live remains with Cole until a replacement is named, as do MSN.com (the company's advertising-supported Web portal and associated content sites) and the MSN sales and marketing teams.

Yusuf Mehdi, who reported to Cole and oversaw MSN.com, search, and the company's advertising platform, has moved to a new position, Chief Advertising Strategist, reporting to Johnson. For the last several years, Mehdi has been the most common public face of MSN, frequently speaking to the press and financial analysts about the division's strategy,

Blake Irving, vice president of the Windows Live Platform Group, gets an expanded role managing the company's online services and Web platform. Already responsible for the server platform of Windows Live Mail and Windows Live Messenger, among other services, Irving has gained responsibility for adCenter, the new advertisement targeting platform that will take on Google and Yahoo. Irving now reports directly to Kevin Johnson, rather than Cole.

Debra Chrapaty, vice president of MSN Operations and responsible for all of the operations of the platform, now reports to Irving instead of Cole.

Martin Taylor has been named vice president of Windows Live and MSN Marketing; he will also temporarily report to Cole. Taylor most recently led Microsoft's competitive response to Linux and Open Source software as general manager, Platform Strategy, a role now taken by Director of Platform Technology Strategy Bill Hilf. Before that, Taylor was an advisor to Steve Ballmer and helped formulate the company's campaign to boost customer and partner satisfaction, which ultimately led to a new bonus system tied to those metrics.

Future Directions

More organizational changes are likely in the coming year, as the current reorganization leaves critical positions vacant. Most important is filling Sinofsky's former role leading the Office business, including both the client applications (notably the Office suite) and servers (including Project Server and SharePoint Server), all of which have a major release in late 2006. The company will also have to find a replacement for David Cole quickly, or reorganize the MSN sales and marketing organization under other managers.

Long-term, Sinofsky's top challenge will be addressing the slow, unpredictable pace of Windows releases. While the problem isn't new, it has become increasingly urgent: competitors such as Apple's OS X have outpaced Windows in adopting new technology, while other strategic Microsoft technologies (such as the .NET Framework, the Internet Explorer browser, and its desktop search client) have not been able to ride Windows releases into the market against their competitors. Of Microsoft's three top business segments, Windows Client has also had the least success getting customers to purchase licenses on lucrative long-term contracts, in part because the slow pace of Windows releases makes such contracts unattractive.

Sinofsky has demonstrated that he can deliver regular releases of the Office products. However, it's less clear that he can change the culture and strategic imperatives of the Windows unit. He is certainly not the first manager to join the unit toward the end of a long product cycle with a mandate for change: Brian Valentine, now the leader of the Core Operating System division, came in toward the end of the delay-ridden Windows 2000 development process, only to see Windows Vista go through a similarly long, painful process as the team tried to integrate technologies such as the .NET Framework and a SQL Server-based database engine into the OS.

Leading Office, Sinofsky could afford to defer the adoption of key Microsoft technologies to make ship dates; leading Windows, a much more strategic ship vehicle for such technologies, Sinofsky might have less freedom. To succeed, Sinofsky will need support from the thousands of Windows developers all the way up to the company's chief software architect Bill Gates, who might have to temper his pursuit of "integrated innovation."