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Microsoft Announces Major Reorg, Elop and Tatarinov Out

Microsoft on Wednesday announced a reorganization that will consolidate its business groups and engineering teams in an effort to integrate its cloud and mobility solutions.

The shakeup comes as Microsoft looks to close out its fiscal year on June 30. Microsoft typically has its annual reorg at this time of year.

Several senior executives will be exiting Microsoft as part of the changes. Stephen Elop, the former CEO of Nokia who was once considered a front-runner to replace Steve Ballmer as CEO, will be among those leaving the company "after a designated transition period," along with Dynamics chief Kirill Tatarinov and Senior Vice President of Technical Strategy Eric Rudder.

Jo Harlow, another former Nokia executive and head of the Microsoft Smart Devices team, is also leaving Microsoft, according to The Verge.

Nadella said in an e-mail to employees that Microsoft is consolidating the company's business units. The Dynamics business, long held by Tatarinov, will fall under the cloud and enterprise business led by Scott Guthrie. Meanwhile, the devices group headed by Elop will be combined with the operating systems group led by Terry Myerson. The combined organization will be called the Windows and Devices Group (WDG).

"This new team brings together all the engineering capability required to drive breakthrough innovations that will propel the Windows ecosystem forward," Nadella said in his e-mail. "WDG will drive Windows as a service across devices of all types and build all of our Microsoft devices including Surface, HoloLens, Lumia, Surface Hub, Band and Xbox. This enables us to create new categories while generating enthusiasm and demand for Windows broadly."

Nadella noted that combining Dynamics with the Cloud and Enterprise Group "will enable us to accelerate our ERP and CRM work even further and mainstream them as part of our core engineering and innovation efforts. C+E will work closely with ASG [Applications and Services Group] to ensure the end-to-end experience is cohesive across communications, collaboration and business processes."

Chief Strategist Mark Penn will also be leaving Microsoft in September, Nadella said, although he described Penn's departure as "unrelated to the engineering restructuring changes." In his letter to employees, Nadella said that Penn, a former Clinton aide, is leaving Microsoft to start a private equity fund.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.