Microsoft today announced a major shakeup in the continually troubled Entertainment and Devices Division via a letter from Steve Ballmer to employees:
Robbie Bach and J Allard, founding fathers of Microsoft’s Entertainment & Devices Division, are leaving the company as part of a broader restructuring that will give CEO Steve Ballmer more direct oversight of consumer businesses including Microsoft’s struggling mobile unit.
The changes — a major management reorganization, even by Microsoft’s standards — will reshape the division leading the company’s battles against Google, Apple, Sony, Nintendo and other rivals in the hard-fought consumer technology market.
Bach, 48, president of the division since its inception five years ago, isn’t slated to be replaced. That will effectively dissolve the division’s current structure and leave the existing Xbox and Windows Mobile leaders to report to Ballmer starting in July.
Microsoft is describing Bach’s departure as a retirement. He said the decision was his own, and he wasn’t encouraged to leave. He’ll remain at Microsoft through the fall, to ensure a smooth transition.
Speaking with TechFlash, Allard said his decision was unrelated to the recent cancelation of the "Courier" dual-screen tablet project that he had championed inside the company. Allard said he doesn’t plan to work for Apple, Google or any other Microsoft rivals. After 19 years at the company, he said, he wants to devote more time to his personal interests, particularly adventure sports.
The separation of the Windows Mobile unit from the current Entertainment & Devices reporting structure also reflects the company’s efforts to connect its mobile initiatives with a wider range of products, including its online services and traditional software.
Don Mattrick, the senior vice president in charge of Microsoft’s Interactive Entertainment Business, will report directly to Ballmer as part of the management changes, as will Andy Lees, the senior vice president who leads the Mobile Communications Business.
Windows Web Services is born. Antoine Leblond, who has been Senior Vice President of the Office Productivity Applications Group, is moving to a new role: Senior Vice President for the Windows Web Services team. What is Windows Web Services? Good question. CEO Steve Ballmer’s e-mail describes it as “integral Windows services that today deliver updates, solutions, community and depth information for the Windows consumer.” Leblond will be reporting directly to Windows/Windows Live President Steven Sinofsky.
Office gets a new engineering chief. Kurt DelBene, Senior Vice President of the Office Business Productivity Group, is now head of all of the engineering responsibilities for the Office business.
Former Live Platform Services head David Treadwell moves out of the Windows division and into the Interactive Entertainment Business (the part of Microsoft that oversees Xbox and video games).
Xbox has finally started making money after the billions poured into it, but the Windows Mobile story was acknowledged even by Microsoft to be a vast missed opportunity verging on a disaster. Microsoft doesn’t like to lose markets where they used to have a commanding presence. The other entertainment products are yawners (e.g. Zune), but Mac Office is still a money maker and customers still love Microsoft keyboards and mice. Unfortunately they are the smallest and least visible part of the E&D menagerie.
The pixels were barely cool from the Zune 2 announcement press releases, when Microsoft named Rick Thompson as the new head of the Zune business reporting to J Allard. Thompson is currently the corporate vice president of the Windows Live Advertising and Monetization Platforms, but he is an old Allard crony:
Today, if you check out the bio Web page for J Allard (of Xbox and Zune fame and currently Corporate Vice President of Design and Development for the Microsoft Entertainment and Devices Division), you’ll notice that the usually “very smooth” Allard is sporting dreadlocks and holding a Sony PSP. It’s all a result of losing a bet as he explains. Hat tip to Patrick Klepek at 1up.com who’ll retain the spiffy photo and the explanation long after it disappears from the Microsoft site.
Bryan Lee, Microsoft’s Corporate Vice President, Entertainment Business, who in December 2005 took over “as head of a new entertainment business charged with overseeing the company’s growing digital efforts in music, television and video,” has decided to move on:
A senior Microsoft executive who oversaw the launch of its Zune digital music player plans to leave the company, the world’s largest software maker said on Wednesday.
Bryan Lee, corporate vice president at Microsoft’s entertainment and devices division, also played a critical role in shaping the Xbox game console business and the introduction of its Internet Protocol television software.
Lee is a key deputy of Robbie Bach, head of Microsoft’s entertainment and devices division. J Allard, a rising star within Microsoft and one of the early Xbox leaders, will now take full responsibility for the Zune business.
Lee plans to leave the company in the next several weeks to pursue personal interests, Microsoft said.
It could be a variety of things of course, but the natural inclination is to view this as a rearrangement of the deck chairs after HMS Zune clipped the iPod iceberg.
Update: Speaking of which, here’s alarming news from Microsoft’s Zune Insider:
If you have a Zune that isn’t skipping (which, truth be told, is the majority of owners), move along, nothing to see here, move along. But if the content from ZMP is skipping on your device, I want to tell you that the team is aware, and is working on it.
Update 2/2: Antone Gonsalves at InformationWeek:
In other executive shuffling, Joe Belfiore, VP of Windows Media Center, and Enrique Rodriguez, VP of Microsoft’s TV Division, who both reported to Lee, will now report to Bach.