Microsoft Puts on Midlife Executive Bulge

This evening, Microsoft announced the biggest round of executive promotions since the November 2005 reorganization that created three president positions. Microsoft announced 14 promotions, although surely there were others following the company's annual midyear review.

More changes are sure to come, particularly as executives assuming new positions build out their organizations. People on the move up will be sure to bring some close associates with them.

The executive promotions mark more bulging of upper management ranks. Given just how incredibly slow moving is Microsoft compared to the nimbler Google, more management layers won't create competitive advantage. That said, Microsoft has promoted some very successful managers. Unfortunately, most of them are also long-term employees steeped in a corporate culture stuck in the 1990s.

The executive changes, while significant, are perhaps less important than some other organizational changes. Microsoft is embarking on an aggressive Windows Vista + Windows Live marketing campaign that is more than just about selling the operating system or Web services. Organizationally, Microsoft is more tightly aligning the Windows and Online Services group.

Given that as context, I'll discuss what the organizational changes mean to Microsoft.

Five newly promoted executives replace other people or assume responsibilities for new business groups:

Bill Veghte assumes the role as senior vice president of the newly combined Online Services & Windows Business Group. The new organization reflects Microsoft's commitment to software plus services where it matters: Windows. Veghte will be charged with operating system plus services business strategy and MSN, search, Windows and Windows Live sales and marketing.

Veghte's ascension is the end for Steve Berkowitz, who had been senior vice president with the Online Services Group. Berkowitz is out but not gone. He will remain with Microsoft through a planned transition ending in August.

Veghte's new responsibilities acknowledge that the Online Services Group didn't have enough pull on its own. I can't emphasize enough that Microsoft will push hard the bundling together of Windows and Windows Live. The approach is consistent with the MSN-to-Live rebranding from more than two years ago.

Microsoft also is tacitly acknowledging that Windows doesn't have enough oomph on its own. The software plus services strategy is very much about keeping Office and Windows relevant, even as the Web 2.0 platform pulls away consumers, enterprises and developers. Veghte is taking on a huge responsibility, adding online services to his already prominent role in the Windows Business group.

Something else: Veghte will keep some of his OEM responsibilities. That move isn't just about existing OEM relationships, but the future. For Live plus Windows bundling and marketing to succeed, Microsoft will need OEM cooperation.

Steve Guggenheimer replaces Scott Di Valerio as corporate vice president of the OEM division. Di Valerio left Microsoft last year. "Gug" is a good fit in the role, for which there will be some shared responsibilities with Veghte. The new OEM executive has worked with the channel or other Microsoft partners for many years. He's an excellent choice for the role. Most recently he was general manager for Application Platform Marketing.

Andy Lees replaces Peter Knook as senior vice president for Microsoft's Mobile Communications Business group. Knook's departure leaked out earlier today ahead of this evening's organizational changes announcement. Lees, who previously was corporate vice president of the Server & Tools Marketing and Solutions group, is a surprise choice replacement—particularly, for the timing.

At this week's Mobile World Congress Microsoft came out with strong messaging about the importance of the consumer market. Microsoft said that its mobile strategy would have increasing consumer emphasis. But Lees' roots are business, not consumer. That said, what the mobile group needs is even better operational execution, particularly as Apple's iPhone or Google's Android increase competition. Server & Tools is one of Microsoft's most successful business groups.

Roz Ho assumes the role of corporate vice president of Premium Mobile Offerings. Ho takes on the real consumer mobile responsibilities, by leading Danger, which acquisition Microsoft announced on Monday. Former general manager of the Macintosh Business Unit, Ho ran one of Microsoft's most successful consumer organizations. Macintosh isn't necessarily a beloved word at Windows-centric Microsoft. Ho succeeded running a niche business for cult loyalists, which won't be so different from Danger, the software and services provider for T-Mobile Sidekick.

Brad Brooks replaces Michael Sievert, in role of corporate vice president for Windows Consumer Product Marketing. Brooks is one of the few Windows executives to have survived the Windows Vista launch fiasco. Sievert is its star marketing casualty. Brooks has long experience in the Windows group and had marketing responsibilities for launching Windows Media Center. He's a good choice for a role that expands what he had been doing.

But Brooks steps into a tough position. Vista consumer marketing is a train wreck. There has been no real Vista consumer marketing since about April 2007. The task ahead is daunting, even with the Windows Vista + Windows Live marketing campaign rapidly coalescing. Wish him lots of luck. He'll need it.

Most of the other executive changes are straight promotional title changes, with no real expanded responsibilities. But one other senior executive change is worth highlighting:

Satya Nadella swaps "senior" for "corporate" in his vice president's title in the Search, Portals & Advertising group. Nadella's role will expand from leading engineering for adCenter, Live Search and billing and subscriptions (including Microsoft Points) to include MSN engineering and programming.

Nadella and Veghte will join Brian McAndrews, senior vice president of the Advertiser and Publisher Solutions group, in expanded roles for MSN, search and Windows Live. How much their roles ultimately expand may depend on whether or not Microsoft acquires Yahoo.

By the way, the press release announcing the organizational changes refers to adCenter as "Microsoft" rather than "MSN." Microsoft adCenter is an important branding change that I hadn't really paid attention to; I'm so used to calling it MSN adCenter. While some pundits have predicted the death of Live, I've long said that if Microsoft would bury any brand it would be MSN. I would watch for lots of Live branding tweaks in the months ahead.

The remaining executive changes are mostly straight promotions. They are, in alphabetical order:

Walid Abu-Habda moves up from general manager to corporate vice president for the Developer and Platform Evangelism group.

Chris Capossela moves up from corporate to senior vice president, of the Information Worker Product Management group.

Larry Cohen moves up from general manager to corporate vice president for Corporate Communications.

Kurt DelBene, replaces "corporate" for "senior" in his vice president's title, for the Office Business Platform group.

Antoine Leblond is another corporate vice president become "senior," for the Office Productivity Applications group.

Scott Guthrie moves up from general manager to corporate vice president for the .NET Developer Platform.

S. Somasegar moves up from corporate vice president to senior vice president of the Developer division.

Brian Tobey adds "corporate" to his vice president's title for Manufacturing and Operations of the Entertainment and Devices division.