Q&A: Kevin Johnson Discusses the Microsoft Platforms & Services Division’s New Executive Structure

REDMOND, Wash. , March 23, 2006 — Today Microsoft announced a broad restructuring of executive roles in its Platforms & Services Division (PSD), which is responsible for Windows products, Windows server products, the company’s online businesses and Live strategy. The moves were made to enhance the leadership team and structure across the division, advance Microsoft’s “software + services” and Live strategy, increase the organization’s ability to deliver innovation to customers, and target new growth opportunities.

To get an idea of what these changes mean for the division, its products, partners and customers, PressPass sat down with Kevin Johnson, co-president of PSD, to get the details.

For more information regarding the new executive structure, roles and responsibilities, see the announcement made today.

PressPass: What does the Platforms & Services Division expect to accomplish with the reorganized structure announced today?

Kevin Johnson, Co-President, Platforms & Services Division

Johnson: The rationale underpinning these changes is three-fold. The first element is aligning PSD to advance our software-based services vision and strategy, and optimizing the organization for the next wave of innovation relative to Windows Live.

Secondly, we are putting ourselves in a position to manage the expected growth of PSD due to its pipeline of products and services over the next 12 to18 months. These include new growth opportunities such as online advertising, emerging markets, and enterprise computing infrastructure, as well as new and existing products – Microsoft SQL Server, Visual Studio, the upcoming Windows Vista, “Longhorn” Server and the next versions of our server technologies. Windows Client also has growth opportunities in premium offerings, new solutions for emerging markets and in reducing unlicensed PCs.

Innovation is the core of our business, and we are always looking to enhance our ability to deliver on that promise. In this case, we are focusing on ways to improve clarity of decision-making, drive greater accountability and reduce layers in the organization so we can move faster. It also means utilizing expertise that we have across my division to embrace the services vision and the rapid release cycles that a services approach can enable. Also, the expertise built by MSN and Windows Live in services and online advertising will be invaluable to the rest of the businesses within PSD.

PressPass: Were these moves made in response to any pressure from competitors?

Johnson: While we operate in a very competitive industry, these changes are not a reaction to any one specific company. Generally speaking, this new structure will allow us to compete more effectively and with more focus against a broad group of competitors and better enables us to center around customers’ needs as they evolve over time.

PressPass: Can you describe the relationship between Windows Live and Windows, and what implications this reorganization may have for that relationship?

Johnson: Windows Live is a set of Internet-based services designed to be the ultimate companion for Windows. It is built using Windows platform functionality that is available to the entire developer community, and will ship separately from the operating system delivering cool new experiences that bring together all the information and relationships that are important to consumers and extend and enhance the Windows experience. As such, Windows Live will complement Windows, and work with Windows XP, Windows 2000, and of course with Windows Vista.

The new engineering organization will optimize Windows Live to deliver an ongoing stream of innovations for customers, while experiences in Windows will ship more frequently than they have in the past, with core Windows operating system platform shipping major revisions with step function changes for developers at regular, predictable cycles for industry partners.

PressPass: How will employees be affected by these changes?

Johnson: There are more than 19,000 full-time Microsoft employees worldwide in the PSD organization. While this is a reorganization of the entire division, most jobs will remain the same. Of this group, fewer than 300 engineers and staff in the eHome division will be moving to the Entertainment and Devices division. This is a restructuring to position us to deliver in the future and we want every employee in this division focused on that goal and have a clear understanding of how they fit into this broader vision. There are no reductions in staff. Our people are hard at work and we need to keep it that way.

PressPass: Given that Steven Sinofsky is coming over from the Office group, do you foresee further reorganization in the Windows division once he takes the reins?

Johnson: At this time there are no broad organizational changes planned. However, Steven will work with his team on defining the future strategy of the Windows business. This work could lead to some refinements in the organizing structure.

The changes announced today, however, are primarily about putting us in a better place to innovate and deliver new forms of value to partners and customers. Innovation will continue to be the driving force in Windows and across the company. Under Steven’s leadership, the Windows team will continue to build on its legacy of innovation, and the organization as a whole is better positioned to deliver innovative products and solutions.

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