Microsoft Reorgs Business Division, SMS&P Unit

Microsoft continues to revamp and remodel its applications business.

In the latest reorg, announced internally on Wednesday, Orlando Ayala, the COO of Microsoft Business Solutions (MBS) and senior vice president of Microsoft's Small and Midmarket Solutions and Partners group (SMS&P), is moving into a new position aimed at boosting Microsoft's presence in "emerging segments."

MBS is the group charged with pushing Microsoft's ERP and CRM lineup and last fall was moved into an overall Microsoft Business Division headed by Jeff Raikes, group president.

Ayala's COO duties will be divvied up by his former direct reports Tami Reller, Craig McCollum and Eddie O'Brien. That triumvirate, which drove marketing, sales and operations respectively, will now report to Doug Burgum, senior vice president of MBS.

Ayala's SMS&P shoes will be filled by Eduardo Rosini, who becomes corporate vice president for worldwide SMS&P reporting to Microsoft COO Kevin Turner.

Ayala, now senior vice president of the new Emerging Segments Market Development group, also will report to Turner.

Turner joined Microsoft last year after 20 years at Wal-Mart and is seen as a rising star in top management at the company.

On the partner front, Allison Watson, vice president of worldwide partners, was promoted to corporate vice president. As one of 110 corporate vice presidents in a company of more than 70,000 employees, Watson will be a prominent partner-centric voice in a top leadership post, Ayala said.

Underlying all this is a shift of SMS&P, which had reported to Burgum within MBS, over to Turner's group. A spokeswoman said SMS&P results will remain on the MBS P&L, however.

In an interview with CRN, Ayala said his new group will target constituencies in "the middle or at the bottom of the economic pyramid where accessibility to our technology and resources is not high."

Microsoft's current enterprise and SMS&P units target the more affluent top tier of that pyramid, he noted, and the company needs to better penetrate the remainng segments. He cited Microsoft's Flexgo subscription pay-as-you-go model as an example of the type of thing the group will do. The goal is to make the technology affordable to people who might not have the wherewithal to pay the going rate for it in the developed world.

NEXT: The Future of Dynamics CRM

Indeed, Microsoft is watching warily as low-cost Linux solutions take hold in third-world countries.

"Flexgo allows you to secure the assetmaybe you get a free computer, you pay a fee, maybe with a card, and if you stop paying, the computer stops working." He also said the nascent Windows Live and Office Live software service models would also likely be very pertinent to this market.

In terms of product organizations, the Dynamics CRM development group under David Thacher will move into the Office group under vice president Kurt DelBene. But, MBS vice president Satya Nadella will continue to run the technology roadmap for all the Dynamics products including CRM, Burgum said Wednesday.

In a series of interviews last week, Microsoft executives told CRN that they expect CRM to be Microsoft's next $1 billion product. Moving development closer to the core Office and SharePoint platform group makes sense in that regard, Burgum said.

"Kurt's key anchor is SharePoint and more and more apps will be integrating and leveraging SharePoint, Burgum said.

There are no branding or marketing changes planned for Dynamics CRM. Dynamics is the umbrella brand for the MBS ERP and CRM offerings

This flurry of news did not include the one item most people have been looking for: The name of Burgum's successor as senior vice president, and titular head of MBS.

Last year, Burgum said he planned to step back and launched a search for a successor.

That task was expected to be done in the first half of this year and many had anticipated an announcement at the Worldwide Partner Conference in July. It looks like it will not be happening in that timeframe, although not for the lack of trying, Burgum said.

When a new senior vice president is tapped, Burgum has said he will become chairman of MBS.