Microsoft’s restructuring fails to win the approval of analysts, who say it won’t solve the software giant's problems.
By Priya Ganapati
September 21, 2005
Microsoft’s reorganization of its business fails to tackle the bureaucracy and lack of agility that has plagued the software giant in recent years and is unlikely to revive the company’s comatose stock, analysts said Wednesday.
The restructuring will, however, put the focus on online services, shifting the company’s attention from desktops and better positioning it to take on rival Google, its strongest competitor since
Microsoft created three super groups in Tuesday’s reshuffling: Platform and Products Services, led by Jim Allchin and Kevin Johnson; Business Division, led by Jeff Raikes; and Entertainment & Devices, led by Robbie Bach. These three groups overlook the seven divisions within the company.
Although Microsoft said the realignment will “speed up execution,” analysts said that it adds another layer of bureaucracy.
“It seems like they are moving deck chairs around on the Titanic,” said Peter Cohan, founder of Peter S. Cohan & Associates, a management consulting and venture capital firm. “When I saw the announcement, it sounded like some large bureaucratic organization hiring McKinsey to move boxes around.”
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