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Microsoft office shuffled after Vista delay

Two days after announcing the new Windows won't be out when it was planned, a shake-up hits executives involved.

SEATTLE - Microsoft Corp. announced a shake-up Thursday of the unit that includes its flagship Windows operating system, two days after the company admitted it won't have its next consumer version of Windows ready for the holiday season as planned.

Under the changes, Microsoft said Steven Sinofsky, a high-ranking executive in charge of developing many of the company's Office business products, will lead a new group that includes Windows and Windows Live, a key effort to provide more Web-based offerings.

Microsoft said Sinofsky will focus on planning future versions of Windows, while outgoing Windows executive Jim Allchin will work closely with another Microsoft executive, Brian Valentine, to finish the long-delayed Windows Vista.

Microsoft also said Ben Fathi, a Windows executive working on storage and file systems, will replace Mike Nash as head of its Security Technology Unit. Nash will take an unannounced role at Microsoft.

Security issues were among the reasons for the delay in Windows Vista. But Kevin Johnson, co-president of the unit that is being reorganized, said Nash's departure from that job is unrelated.

The software maker said the restructuring is aimed at improving its online strategy, making quicker decisions without going through layers of executive approval, and responding more nimbly to growing threats from online competitors.

Companies such as Google Inc. and Yahoo Inc. are fast developing Internet-based products for such things as sending e-mail or storing photos, and these free services threaten Microsoft's desktop-bound Windows and other products. Microsoft has responded with a beefed-up online effort of its own, Windows Live.

The reorganization also will create a group to focus on the engineering of new online products, and another to handle business functions, such as marketing and advertising sales, for those products.

Other groups will work on the core operating system and on servers and software tools.

As previously announced, Allchin, co-president of the Platforms and Services division, will retire next year. Until then, he and Johnson, formerly a Microsoft sales and marketing executive, will continue to lead the division.

Analyst Ted Schadler with Forrester Research said Thursday's changes signal that Microsoft intends to give more power to those who market and sell products, decreasing the sway of engineers who develop the software.

That's a smart move, he said, because the company is facing an increasingly saturated market for Windows and ever-more-sophisticated competitors.

But Schadler said it's too early to say whether the reorganization will help Microsoft compete with such wide-ranging threats as the Firefox Internet browser and Google's increasing array of online consumer products.

"The jury's definitely still out," he said.

[Last modified March 24, 2006, 02:15:43]