[crazygringo]

This actually makes a lot of sense. A lot of articles have been talking about how there's no obvious candidate for new CEO, and that it's basically too much for any single person to take on.

But if Microsoft were split into divisions (Windows/Mobile/Tablets, Enterprise/Office, Xbox/entertainment, Bing/Hotmail somewhere?) that could freely compete, it's actually pretty easy to imagine suitable CEO's for each one.

I'm truly hard-pressed to think of any value Microsoft as a conglomerate of these divisions, actually provides, strategy- or synergy-wise -- at least that's visible to those of us outside the company.

But is there any kind of precedent for this? It's common for companies to spin off a division, but I can't think of any company voluntarily truly breaking itself up like this. It's hard to imagine a board saying, "we admit we're not providing strategic value here, let's break ourselves up".

[astrodust]

Remember that every division with the exception of Windows + Office has a hard time turning a consistent profit.

XBox (independent) vs. Sony, Android and Apple is a losing proposition, they may as well sell the division. In a high-stakes game like that, you need a parent company with deep, deep pockets.

Windows independent of Office is worthless. There's virtually no reason to use Windows apart from the Office infrastructure built around it, or the entrenched base Visual Studio developers. It's somewhat popular as a gaming platform, but as Linux starts to be reshaped into a first-class gaming operating system, that will quickly become a non-factor.

The online division is the most troubled, basically a black-hole for money. Surely it could be made profitable, or simply sold for a massive chunk of cash to someone like Yahoo! who could afford to pick it up.

It's not that the divisions would do better independently, but they're part of a highly dysfunctional family that cannot survive independently.

[Locke1689]

Actually, this is mostly wrong.

While Windows and Office are still major components, what was formerly called Server Tools & Business (STB) makes a large amount of money (sometimes more than Windows) and has exhibited the most growth of any division over the past couple years.

In addition, what you refer to as Office is really the Business division, which includes Dynamics (a billion dollar business) so Office really doesn't hold all of the sway you lend it.

[astrodust]

Windows includes Windows Server, and Office is their sprawling business suite. It's hard to say where one stops and one begins, as SQL Server is sort of in both camps.

[mynameisvlad]

Windows does not include Windows Server, in Microsoft-land. Windows Server is definitely in the Server and Tools Business (now Enterprise and Cloud). SQL Server is also in Enterprise and Cloud.

[astrodust]

Is there a chart or diagram which breaks down what's what?

[mynameisvlad]

That chart would probably be pretty big. Here's a description of the pre-reorg divisions.

http://www.microsoft.com/about/companyinformation/ourbusines...

And an incredibly brief and vague description of the new Engineering Groups:

http://www.microsoft.com/en-us/news/press/2013/jul13/07-11on...

[Osiris]

While a break-up into separate companies may not make sense, giving each product group more independence to act like a separate group may allow products to be more flexible and reactive to user demands.

[gutsy]

The average non-power user isn't going to want to learn how to use Linux, they're comfortable with Windows so they'll stick with Windows. I predict that they'll make two very distinct version of Windows next time, one for tablets like Windows 8 and one a lot more like Windows 7 for the desktops.

[rbanffy]

The non-power user will use whatever comes with the computer, as long as it can access Facebook.

[gutsy]

But if it's too different and hard to figure it, they'll deem it as crap and that it doesn't work. That's the biggest reason why MS was so afraid to let XP die.

[astrodust]

OS X is BSD based and you don't need to be a power user to learn how to use it. I'm not sure what your argument is here. With the right UX and application suite, Linux is for all intents and purposes just as functional as Windows is.

[gutsy]

A mac is very expensive, that rules that out.

I know Linux is just as functional as Windows is. Most people on this site know that, but we aren't the ones buying most PCs. Imagine your mom, dad, brother or sister who don't use computers like crazy trying to learn how to use Linux. If it's too different, "it doesn't work at all." Too many people are afraid to learn new things, which is sad.

[astrodust]

I don't know about "very expensive" unless you're in the market for a bargain bin computer. A Mac Mini costs $599, an feature equivalent Dell is maybe $399 to $499, so there is a price premium but it's not outrageous. Plus, you do get significantly better support from the retailer, cheaper upgrade options on the operating system, and a lot of bundled apps that, for some people, are more than worth the extra dollars.

It's not that people are not afraid to learn new things, they just have priorities, and often "learn a new OS" is not on their list.

Remember, Linux has succeeded on Android, so don't think it's impossible for people to use it.

[johnchristopher]

Windows independent of Office is worthless. There's virtually no reason to use Windows apart from the Office infrastructure built around it, or the entrenched base Visual Studio developers.

Windows is still wanted and needed by a lot. We have been hearing windows is dead and linux is that for 15 years now and that ship is still on the drawing table.

It's somewhat popular as a gaming platform, but as Linux starts to be reshaped into a first-class gaming operating system, that will quickly become a non-factor.

It is the only PC gaming platform.

[astrodust]

PC gaming is an increasingly tiny share of the overall gaming market. Mobile has put an enormous dent in that in the last few years, and consoles continue to gain ground. Android is Linux, so Linux gaming, in a sense, has become a pretty big thing. Just not on PC type computers. Not that Valve isn't working to fix this.

I don't know that Windows is wanted so much as it's needed by many, but only because the applications they use are tied to it. This group includes those in industries where they use specialized software that's not ported, or where it has been ported but other tools in their workflow haven't.

It's interesting to note that Pixar uses Maya on Linux even though that's a company created by Steve Jobs. Google uses Linux internally for workstations. It's not that Linux isn't ready, but that it's nearly impossible to buy a Linux laptop or desktop from a major vendor. Dell has maybe one consumer model in their entire lineup.

For the "Facebook and YouTube" crowd, which is arguably over 50% of the users out there, Linux is probably fine. Android shows how it can be cleaned up and made far friendlier than Windows ever was.

[WayneDB]

There's plenty of reason to use Windows apart from Office. You just can't see it because you live in a bubble.

Businesses aren't going to switch to Linux on the desktop anytime this decade or the next because there is very little expertise to be hired and they're not going to buy into Apple's hardware lock-in either for obvious reasons. Consumers aren't going to buy Linux unless it comes pre-installed from a major manufacturer. Even then (we've tried that experiment before) - they still don't buy. Some of them might buy Macs, but the majority certainly won't because they're more expensive and completely unnecessary since Windows already does everything they need.

[auctiontheory]

I'm truly hard-pressed to think of any value Microsoft as a conglomerate of these divisions, actually provides

You must not be an enterprise IT buyer. Here's how it works:

All large corporations use some Microsoft product, be it Windows, Exchange, Office, or something else. And they get volume discounts and significant other discounts off the list price.

"Oh, you want to replace Office with OpenOffice? Hmmm, seems we made a mistake calculating your Exchange licenses - the price just went up 300%."

Is it becoming more clear?

[mbreese]

Isn't that how they got in trouble last time? That's hardly a value for the consumer.

(I know that's not what happened before, but it's still anti-competitive)

[auctiontheory]

It's not a value to the consumer. It's an albatross to the consumer.

It's a value provided to the bottom line of each of the MSFT divisions from/by the existence of the unified Microsoft corporate entity.

[dermotbrennan]

I think there's some value in the goal of having a common interface and set of features across desktop, mobile, xbox, server. People would like that. Microsoft haven't achieved that there yet but it's still a worthy goal. I think slimming down and refocusing might be more effective than a massive break-up.

[devx]

Maybe, but here's the thing. Splitting them like that might help the already rich ones (Windows and Office), while it would hurt the struggling ones (Xbox, Bing, Surface).

I actually don't know how Xbox is doing financially on its own these days, but I doubt it's extremely profitable and has a lot of cash on its own. The consoles usually make the money back over certain period of time from games. Could Xbox survive on its own in that scenario?

As for Bing - it's still losing billions of dollars a year last I checked. So are the Surface tablets, and Skype - well Microsoft paid over $8 billion for Skype, and they're not going to get that money back anytime soon. Hotmail, despite many registered accounts, was pretty dead, and I think only some transitioned to Outlook.com.

[freehunter]

It seems to me like high end gaming consoles are unsustainable anyway. Sony could barely keep Playstation alive if it wasn't sinking money into the product that it had gained from other sales. Microsoft is in the same boat.

Apple and Google's "gaming" division is just co-opted from their existing hardware and don't take significant resources to run. Nintendo is the only company able to keep itself afloat just from console hardware and software, and we see the market it competes in. It seems no one is willing to go toe-to-toe with Nintendo on their home turf.

[ant512]

"As for Bing - it's still losing billions of dollars a year last I checked."

Allowing the successful divisions to survive and the leeches to die seems like a win for MS. Why is throwing away billions on products that produce no return a good thing?

[freehunter]

There's the concept of a loss leader: you lose money on one product because it gains the company money when the consumer buys another product. Remember that the Xbox lost billions year over year for 8 years until it was profitable.

Microsoft has repeatedly shown us that they're playing the long game. If they're predicted to make money even a decade from now, they'll keep posting losses until that point comes (Xbox). If they're predicting a failure, they'll very unceremoniously pull the product (Kin/Zune). To steal a line from Breaking Bad, they're not in the software business. They're in the empire business.

[mhurron]

Sometimes a product is kept around because it has worth beyond making money.

[sidww2]

Xbox/Bing/Hotmail might have a hard time staying afloat w/o the profits from Windows/Enterprise/Office.

[wicknicks]

Maybe have a common pool of resources from which they draw from. That would force the "weaker" companies to compete more or pivot to create better products.