There was quite a surprise today as Microsoft announced that Jeff Raikes, president of the Microsoft Business Division (MBD) will be retiring in September and the replacement is Stephen Elop, current COO of Juniper Networks and former CEO of Macromedia before it was acquired by Adobe:
Microsoft yesterday announced a press event on October 16 featuring Bill Gates and Jeff Raikes to launch the next generation of unified communications software or more precisely, “to highlight the general availability of Microsoft Office Communications Server 2007, Microsoft Office Communicator 2007 and Microsoft Office Live Meeting.”
In the internal Microsoft email announcing Friday’s aQuantive acquisition, Steve Ballmer also announced a significant reorganization:
Microsoft has reshuffled its organizational chart again, this time adding the Developer and Platform Evangelism team to its Server and Tools division, and then moving that merged entity into the Business division.
The server and tools business, which falls under the leadership of Senior Vice President Bob Muglia, was moved “intact” from the Platform and Services division to the Business division, whose president is Jeff Raikes, a Microsoft spokesperson told eWEEK.
The developer and platform evangelism team, led by Corporate Vice President Sanjay Parthasarathy, has been merged into the server and tools business, and now reports to Muglia. The changes are effective May 18.
The Business Division is mostly Office although it also includes the old Microsoft Business Solutions and had already picked up Exchange Server as part of the Unified Communications push.
Various explanations are bring offered by Microsoft and the punditry (see above links) for the reorg including that Raikes has now been anointed as Steve Ballmer’s successor. More interesting to me than the executive kabuki dance is why Server and Tools doesn’t rate as a completely separate division as its financial performance would certainly warrant (e.g. here). It still seems to be the Rodney Dangerfield of Microsoft business units. Anyhow, although there has been no indication to the contrary, one certainly hopes that the practice of breaking out Server and Tools financial results will continue.
In February there was a rumor that Microsoft was acquiring mobile phone applications vendor Tellme, but it was promptly denied. Now the rumor is back and the purported price tag is a whopper according to Om Malik:
The talks continue, but some of our sources say don’t expect an announcement Tuesday. The two outlets speculate that Tellme could fetch up to $800 million, but our source, someone quite familiar with the company say that the price is north of the reported numbers.
Even an $800 million price tag would make it the fourth largest acquisition in the history of Microsoft. Why would Microsoft pay such a hefty price? C/Net speculates that the Tellme technologies could find their way into enterprise applications. Microsoft is betting heavily on the convergence of data and voice.
The real reason will be Microsoft Mobile and non-PC devices where Tellme’s voice interface and back-end server technologies can come in quite handy.
“The leading edge battleground between us and Google in local search really will come on the phone,” Microsoft Chief Executive Steve Ballmer told the WSJ back in May 2006.
Both explanations could be correct since Microsoft’s Unified Communications Group is part of Microsoft’s Business Division (mostly Office) under Jeff Raikes who was suggested as the receiving executive in the CNET article. I’m still puzzled how Tellme’s open standards platform and Java mobile phone client fit in with Microsoft’s mobile plans, but if the deal goes through, I’m sure we will be treated to some sort of explanation.