It's that time of year. Microsoft mid-year reviews are over. Summer vacations are winding down. And Microsoft execs are dreaming big.

Perfect time for a reorg, isn't it?

To most, such a move would seem counterintuitive, at best and suicidal, at worst. After all, Microsoft is right in the middle of some key product development/launch cycles. Before the end of this year, the company is set to roll out a new version of its Visual Studio tool suite, its SQL Server database, and its next version of Windows Server, and its Xbox 360 gaming console, along with a handful of other new products.

But if I were Microsoft CEO Steve Ballmer, I wouldn't be thinking conservatively. Shareholders are crying out for action. Loyal Softies are seriously considering retiring. New kids like Google are nibbling on Microsoft's heels (shins, knees and more).

So why not try going back to yesterday? Realign the mother ship by returning the focus to Microsoft's core strengths: Windows, Office, and Everything Else.

The whole Microsoft universe to revolve around the company's two cash cows: Windows and Office. But in April 2002, Ballmer chopped Microsoft into seven independent profit-and-loss (P&L) centers. They are: Windows Client, Information Worker (Office), Server and Tools, MSN, Mobile and Embedded Devices, Business Solutions and Home and Entertainment. In 2003, Ballmer deigned that each P&L should have its own chief financial officer.

Microsoft execs moved to the seven-unit structure to help make the company more agile (among other reasons). But now that the Redmondians are coming under fire for failing to innovate quickly enough, why not try reassembling the Microsoft business units in a more sensible and realistic fashion?

If I were Ballmer, I'd ask why Windows currently is spread across two divisions (client and server and tools). After all, there is just one Core Operating Systems Division (COSD). So why not create a single, unified Windows division? You could make a strong case for putting tools in the same division, given the growing synergies between Windows and .Net, Windows Communications Foundation (a k a "Indigo") and other Connected Systems Division wares. And we'd suggest Microsoft mix into the mega-Windows division the Mobile and Embedded unit, whose offerings are based on Windows and Windows CE, too.

While Ballmer's at it, why not fold Microsoft Business Solutions (MBS) —
which is building more and more atop the Office System platform — right into the Information Worker division? That would make MBS more of an Office sub-unit, the same way that the Real-Time Collaboration division is already. (And it would end, once and for all, the questions about when MBS would show a profit, as Microsoft would no longer break out MBS profit and loss separately.)

In the EE (Everything Else) category, we'd lump anything and everything with a service component. MSN, Xbox, Encarta, Money, Windows OneCare, Energizer…you name it.

Moving away from the seven-business-unit structure would likely result in the retirement of some of Microsoft's established brass. (After all, once you've been head honcho, who wants to be one of the peons again?) But some Micrsoft watchers would argue it's high time for new blood.

Has the endlessly muggy New York summer scrambled my brain? Would a reorg hurt Microsoft more than help it at the moment? If you were SteveB, what would you do to keep your competitors guessing, your customers complacent and your shareholders content? Talk back below or write me at mswatch@ziffdavis.com and
let me know what you think.