If we needed further proof of just how far and fast the world of computing is changing, we note now the first ‘official’ recognition of the power of cloud computing in Microsoft’s recent business reorganization. Microsoft is essentially “downgrading Windows,” in the words of Jay Greene in an article in the March 30th edition of The Wall Street Journal. The firm has announced that Terry Myerson, who ran the Windows business, is leaving the company. His division, the More Personal Computing division, which includes Windows, saw its revenues increase by 2% (to $12 billion+), while Microsoft’s Azure cloud platform grew at a whopping 41% clip.
For over 40 years, Microsoft and Windows have been nearly synonymous, notes Greene. Now, Microsoft is reorganizing its business around its growing Azure cloud-computing operations and its Office productivity business. It’s part of CEO Satya Nadella’s willingness to shift Microsoft’s focus away from its traditional roots (e.g., Windows) in the gradual migration from personal computing to smaller, more mobile devices and the web.
Microsoft has grown its Azure operation into the Number 2 cloud hosting operation in the world, behind only Amazon Web Services. Meanwhile, its Office and Dynamics business software operations are growing rapidly and are already multi-billion dollar businesses. (Disclaimer: PSSI is an authorized Microsoft Dynamics partner.)
The Journal reports as well that Microsoft is breaking Windows into “pieces.” The platform technology upon which partners and ISVs build devices, apps and services will fall under the Azure business line, run by Scott Guthrie, in something called the Cloud + AI Platform, and will also include the Augmented Reality business that includes Microsoft’s Hololens device and the AI (Artificial Intelligence) business. Another division, known as Experiences & Devices will include Microsoft’s effort to develop new feature for Windows, notes the Journal.
It’s worth noting that today some version of Windows runs on more than 1.5 billion devices worldwide, and it still accounts for 42% of Microsoft’s revenues. That makes the recent decision all the more sweeping. Not that long ago, Windows was at the heart of the Justice Dept.’s monopoly suit against Microsoft that sought to break up the company, and to which the company eventually signed a consent agreement.
Speaking of this newest development, Brad Silverburg, who ran the Windows division back it’s seminal Windows 95 heyday, noted of the change engineered by Mr. Nadella that “He recognizes the world for what it is, not what it used to be.”