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Why Microsoft CEO Satya Nadella Is Tearing Up the Windows Business

30 March 2018

The big news around today's announcement from Microsoft CEO Satya Nadella is that long-time company employee Terry Myerson will retire. The new setup aims to leverage Microsoft's strongest businesses, like its Azure cloud service and Office 365 subscription software, while Windows gets deemphasized.

As part of the reorganization, Jason Zander becomes executive VP of Azure with the Windows platform team joining him. And after 21 years, Microsoft Executive Vice President Terry Myerson will leave the company.

Now, Rajesh Jha will lead Myerson's former department, renamed as Experiences & Devices.

"Computing experiences are evolving to include multiple senses and are no longer bound to one device at a time but increasingly spanning many as we move from home to work and on the go", Nadella explained in his email.

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"A unified platform-driven approach to product development and delivery should be beneficial for Microsoft", said Mark Moerdler, an analyst at Sanford C. Bernstein, in a report.

Microsoft describes the tool as a "reference implementation for a Windows Subsystem for Linux (WSL) distribution installer application". One will focus on experiences and devices, and the other on cloud and artificial intelligence.

The introduction of Windows 10 with S mode, which delivers predictable performance and quality through Microsoft-verified apps via Microsoft Store, has also contributed to the uptake of the operating system by customers and partners for its performance and reliability. (Microsoft officials have predicted the company could have two-thirds of its Office users in the cloud by its fiscal 2019.) Now, it's trying to do something similar for Windows with Microsoft 365: Create a bundle of cloud services anchored by Windows 10 that will provide the company with a recurring revenue stream. The Windows and Devices Group is being split apart too. Windows, meanwhile, will continue to be led by Joe Belfiore, but with the added responsibility of products like Edge. In addition, Microsoft is creating an AI Perception and Mixed Reality group, to be led by Alex Kipman. It will be responsible the development of Azure and the company's rapidly growing portfolio of artificial intelligence tools, a good portion of which are hosted on the cloud platform. Eric and team will take guidance on all AI-related areas from Harry Shum and work very closely with AI+R. The feature is now limited to Microsoft's Outlook, Hotmail, Live, and Office 365 services-anyone who uses Gmail, Yahoo, or Exchange Server calendars is going to miss out.

Why Microsoft CEO Satya Nadella Is Tearing Up the Windows Business