Is Microsoft going the way of the Apple?


Last Thursday, Microsoft announced that they would be dissolving their current structure and reorganizing. They currently have eight different product divisions, and plan to restructure with four new ones that will be organized around broader functional themes. The main reason for this is to allow for eliminating redundancy and waste, as well as to encourage their nearly 100,000 employees to work more closely with collaborative efforts to build future products. This will make Microsoft look more like its rivals (such as Apple and Google) as an organization – though on a much larger scale – and help it become more competitive in the product areas where it has been losing ground in recent years.

The organizational model used by Microsoft is one that was popularized by Apple (of course), and it focuses on software, hardware, and services rather than individual products or product groups as they had in the past. For example, one executive will be in charge of operating systems now, rather than separate teams developing products like Windows, phones, tablets, and Xbox. In the past, this sparked many rivalries between divisions, and project managers even went to great lengths to avoid dependency on other groups for software, so as to not be “at the mercy of someone else’s development schedule.” This resulted in things like software being developed for one product that had similar functions and features as another existing product. While this should lead to greater efficiencies in product development and can allow better integration among products, it does not address some of the more pressing challenges affecting Microsoft’s current and future revenue stream; for example, as personal computer sales continue to decrease, how does Microsoft plan to adapt its product line?

In my company, we have also begun to realign our departments and personnel around functional groups and are moving away from compartmentalizing each product group within its own line. Is it just coincidence that Microsoft has started doing the same? It certainly is, as Microsoft is the juggernaut of the tech industry and Invivo is a very small subsidiary of a sub-business unit of a division of Philips. In any case, one of the biggest moves came at the end of last week, when it was announced that our already small marketing department would be losing a few members, and everyone else was reorganizing into functional groups where everyone would cover the full product line as it fell under their area of responsibility. As some of our other departments and developers have also realigned similarly, I hope that it will do for us what Microsoft hopes it does for them – increase efficiency and effectiveness.

In light of the above, is your company more like old Microsoft or new Microsoft? If like “old”, do you find that project managers often butt heads with other departments on which they have dependence for aspects of their products or projects? If like “new” do you find that aligning by function rather than products yields better results?


11 thoughts on “Is Microsoft going the way of the Apple?

  1. My company functions more like “Old Microsoft” and it does prevent some challenges. We are very deparmentalized and duplicate efforts unintentionally as a result.

    Most of our projects also require at least some involvement from our IT Department. This is where project managers tend to “butt heads.” There always seems to be a battle for the allocation of IT resources. Of course the IT Department has projects of their own so it becomes even more challenging to obtain their assistance. I think this is where many project managers could use some training of their own. It often times seems that project managers are acting in the best interest of the project, and not the best interest of the company as a whole.

  2. It definitely sounds like Microsoft is restructuring to fall in line with Apple and Google, which is good because I think it’s a change that has been long overdue for Microsoft. I think making such a change will help them get back in touch with their customers and provide more improved products.

    My company is also a lot like Old Microsoft, and working in IT I see project managers butt heads frequently. Due to the lack of cooperation between IT departments there have been many cases of redundant projects and also projects that never close due to resource constraints or complications raised by another IT department. My company recently pulled several project managers from their departments and organized them into a PMO to help address the issue, but it is too early to tell if the problems have been fixed.

  3. This is a very interesting article and blog post. I had to think long and hard on how I felt regarding this topic. I think that this change is a very good, long term idea for Microsoft. I wonder what the implications of getting 100,000 people to change their mentality and structure. It might be easy to implement at first, but what if it is not immediately successful and they need to reorganize again. Are all 100,000 people going to be on board with the same vigor they had before? Will there be outcasts?

    For my company, I would say that we are like the Old Microsoft as a whole, but within our department, we are like the new Microsoft. We are like the old Microsoft because we have departments for sales, purchasing, IT, Ops, etc. and each group funtions on their own, with the (hopefully) greater good of the company at hand. I will speak for sales, since I am in this department. I think that our sales department functions as the new Microsoft because each person in sales has to do many job tasks of purchasing, credit, collections, and quality to name a few funtional areas. I think that it would be intriguing to shape the company like Apple and Microsoft, but I would wonder if the culture of my company would be able to handle changes as described.

  4. I’m not quite sure if my organization is “new” or “old” but project managers do butt heads. The main reason is resource staffing. Managers fight over the “good” resources and sometimes just resources in general. (By resources I mean people because I work for a consulting firm.) And then in between projects, the managers all want their work done first. The second, probably less common, instance relates to different offices fighting over client work. Every managing director wants the sales revenue for his/her office so sometimes, for example, an MD in Houston may fight to get the work being done in Houston by Chicago consultants flying in.

    1. I run into this all the time as well … the other place I see PM’s butting heads is over stylistic differences, especially on large projects. Consultants like to talk a lot, so if the PM’s are not used to working together, it can be a bit sticky the first couple of times with a client if they are talking over each other. The revenue piece is one that we had an issue with for awhile, but they have realigned (somewhat) how revenue is recognized against different MD’s to help alleviate this. I don’t know the details, but it seems to have helped.

  5. I would say my organization is more like the the “old”. However there has been some push to eliminate the competing within the organization. Just about everyday I find myself butting heads with other divisions when it comes to support groups like Quality or manufacturing. My company is fortunate to be mid-sized and usually these issues can be resolved with meeting with the business unit leader and discussing the situation, however all this does cause time delays that could be avoided with less groups. On the other side of the coin the smaller groups does allow for the entire group to be on the same page. Also it does instill a healthy sibling rivalry between groups.

  6. This topic is definitely something that we throw around within my industry quite a bit. Most companies who are exporting commodities also have their own transportation divisions within the company. Many times the transportation division, whether it’s truck, rail or barge, thinks about their own p&l instead of that of the company. Strangely enough, many companies in my industry end up using outside companies for their transportation needs since those companies offer cheaper rates than the internal division. So the money spent on transportation could have been have kept in-house, however due to individual p&l’s it’s outsourced. I think these companies will eventually go to the way of keeping these costs internally versus paying to outside companies and go towards the “new” way of thinking.

  7. We spend a lot of time talking about organizational structure and how it impacts our projects. When the each business operates independently we miss the opportunity to be more efficient, productive and successful. Ultimately we will miss an opportunity to enhance the customer experience. It is much easier said than do because we are a company of many business units and acquisitions. There have been great strides in recent years to become more aligned but we still more work to do. Our focus is about become “one” company rather than individual units.

  8. I think that this could potentially be a great move for Microsoft. It will provide better alignment for the firm and hopefully allow them to develop better products for the marketplace. One thing that I hope they focus on though is avoid a Matrix structure for the firm. Developers need to concentrate on a task at hand and perhaps one of their current weaknesses has come from the spreading of time for key individuals across multiple platforms. For an example, a coder might be asks to work on Office products for the morning and Windows for the afternoon which complete reduces efficiency due to change of mindsets. There was sometime similar that took place within my firm. When we started offering outsourcing services to other asset managers, my current division was placed in a structure whereby all trade support for all clients was completed on a single team. This whole structure was moved around so that a single team would focus on a single client. The relationship was owned. Of course, there are also disadvantages to this type of structure as the true experts are moved into one silo and there is a potential for other teams to summer a brain drain. Perhaps Microsoft should take a lesson from my organization and develop an internal “SME” team or a team of selected material experts. This time could move between divisions within Microsoft and work to be the “A” team to correct any issues that are experienced.

  9. I work for AOL and I believe they follow a similar setup to what Apple does. My department has a certain set of functions but almost all of AOL’s advertising product offerings can come across my desk at any time. Whether it’s advertising on a mobile device, on an Apple tablet or on a normal computer, I perform the same overall task of quality assurance testing and troubleshooting but it varies from product to product. I think this allows me to fully understand this testing phase; however, because AOL adds new products often it’s sometimes difficult to keep track of what is allowed/not allowed. My department has an internal wiki that we use to share best practices and complex configurations, which allows for knowledge sharing amongst the group. Great topic, thanks for sharing!

  10. Some great comments here already and I agree with them. I think it’s a great idea Microsoft is moving away from its old strategy that relied on PC computing from the early to late 90s. Times have changed and with Tablets getting more and more popular it is only a matter of time before there is another shift in computing. Microsoft it seemed for a long time wasn’t the same company that it used to be. There was a sharp disconnect between their customers and them. With them making products their customers had no need or want for. While Windows 8 wasn’t exactly a failure it did alienate a lot of the PC crowd because of it’s heavy reliance on touch based computing where most users of the Microsoft ecosystem were accustomed to using a keyboard or mouse instead. This was the last straw apparently for Microsoft which in the past had worked in tandem with customers and developers to make something that everyone could use and appreciate. This transition is evident with the new Microsoft Office for the iPad. This shows that some of the people now at Microsoft that didn’t have as much say are being able to express their ideas into what is trending today. Something that would never have happened with Steve Balmer at the helm of Microsoft. Already things are looking up for Microsoft and hopefully they can bridge the gap between the customers and themselves as time goes by.

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