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Microsoft mulls 'major restructuring' with focus on devices and services like Xbox and Skype (update)

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Ballmer Surface
Ballmer Surface

Microsoft is reportedly mulling a restructuring that would see the company position some of its key executives to strengthen its "devices and services" vision. CEO Steve Ballmer outlined "a fundamental shift" towards devices and services for the company just ahead of the Windows 8 launch, but so far the software giant has only launched two Surface tablets and unveiled a new Xbox on the devices side.

All Things D reports that a new structure may include "larger roles" for executives including server chief Satya Nadella, Skype boss Tony Bates, and Don Mattrick who heads up the division responsible for Xbox. It's not clear how a new potential management structure will impact other divisions like Windows or Windows Phone, but the rumored restructuring suggests Microsoft is still serious about its devices and services plans.

New devices on the way?

Microsoft has positioned its new Xbox One console as the key to its living room future. In a series of moves related to Xbox services the company no longer sees its console as primarily devoted to gaming. Microsoft is also rumored to be preparing a 7-inch Surface tablet, with close gaming ties, a smartwatch with ties to the Xbox and Surface brands, and a low-cost Xbox TV device.

The news of a major restructuring central to Xbox, server, and Skype underlines Microsoft's own Xbox One announcement, with a focus on the cloud and Skype integration. Although the new Xbox is powered by Windows, the company acknowledged that briefly during its hour-long unveiling with no sign of the Windows branding on the upcoming console. With Microsoft moving to simple Surface RT and Surface Pro branding for its tablets — instead of Surface with Windows RT and Surface with Windows 8 Pro — it seems that the potential of the Windows brand moving to the background is slowly becoming a reality. We're now waiting to see how these potential restructuring efforts pan out, and what, if anything, replaces the powerful Windows brand.

Update: Bloomberg has confirmed news of the restructuring. According to its report, Ballmer is considering a new structure for Microsoft split along four divisions: an enterprise sector run by Nadella, a hardware one run by Mattrick, a division for applications and services under current online services head Qi Lu, and an OS group run jointly by Windows Phone head Terry Myerson and Windows head Julie Larson-Green. Tony Bates would also be given a "significant role."