Early Shakeups In Nadella’s Microsoft

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Earlier today Kara Swisher reported that Microsoft’s Tami Reller, executive vice president of marketing, and Tony Bates, executive vice president of the company’s Business Development and Evangelism group will both depart. A reportedly formal announcement date of Tuesday now appears to be little more than a coming perfunctory exercise in rehashing.

If nothing else, the changes indicate that Microsoft under Satya Nadella will look quite different than the firm during Ballmer’s reign, though there doesn’t appear to be indication yet that the company’s new CEO forced the changes.

The exit of Bates is sensible as he was an unselected CEO candidate. Swisher reports that he has received several offers for the top seat at technology firms, and there is recent precedent for Microsoft leaders leaving the mothership for top roles at other companies.

Reller is more interesting, given that before her current role she was part of the duo in charge of Windows in the post-Sinosky era. Her then-cohort Julie Larson-Green recently picked up a new, internal role to clear space for the incoming Stephen Elop who will take up her job as the head of Microsoft’s hardware efforts.

In addition to the above, advertising in the new Microsoft appears to have been removed from the hands of Mark Penn. Tom Warren, a reporter who covers Microsoft, remarked on that change this way:

Screen Shot 2014-03-02 at 3.21.03 PM

I doubt that view is too controversial either inside or outside the company.

Microsoft declined to comment on the reported executive changes. 

Opportunities For Change

Call it a chrysalis moment. Nadella inherited a firm on a firm financial footing, but one still in transition regarding its business model, and organizational structure. The changes listed above could allow Microsoft to revamp its public messaging strategy (advertising), and developer and OEM outreach. New installs in those roles could lead to structural changes.

Raise your hand if you think that Microsoft’s marketing and platform messaging couldn’t use a burnishing. To be fair, Microsoft’s recent ad campaigns have received plaudits, and the firm certainly has done a better job of late attracting developers to its Windows 8.x and Windows Phone platform (successes that are bearing fruit, I’d say). But Microsoft has more, and harder work ahead of it to not simply establish its platforms — which it has done to a modest, if stable extent — but instead to drive them to market parity with the far larger iOS and Android ecosystems.

So change might not be a bad thing. Provided Microsoft brings in exceptionally strong people to recently vacated leadership roles that are key to its growth.

It’s simple to forget that Microsoft’s time atop the platform pyramid is either over, under severe threat, or at least shared. And that if Microsoft fails to reassert ascendency in that realm — or again, some sort of equivalence — its still-healthy enterprise-facing products and services could face future market and dollar-share erosion to rival products and services that are native to platforms that have supplanted the venerable Windows et al. (Windows has to become young again, essentially.)

To do that, Microsoft needs to woo both the regular public, and the technology community. Hence why Reller and Bates leaving the firm somewhat in unison is interesting, as it could provide Nadella with an obvious, organic, and unforced — in the non-negative sense, of course — opportunity to retool and advance Microsoft’s message to consumers (buy our stuff, it’s the best!), and developers, partners, and the like. It could stumble at this, but the opportunity is now at least now open by default.

It’s hard to gauge the early success of a new CEO of a complex company with massive reach and product diversity. But I think that when it comes to the most publicly consumable fare that a company produces you can catch earlier changes in the wind. So, we should keep our ears up.

Finally, I wouldn’t cast the above changes in staffing as a negative for Microsoft, except in that Microsoft is losing two very competent workers. By that I mean that the news is not indication that Microsoft is melting internally following Nadella’s ascension. So far, I’ve heard no chatter to that effect.

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