Week in review: Microsoft mixes it up

Microsoft this week announced a sweeping reorganization of the company into three new divisions, a shift that will lead to the retirement of longtime Windows development chief Jim Allchin.

But the software giant wasn't the only one mixing it up this week, as the Gulf Coast braced itself for yet another major hurricane. Sony announced a restructuring plan that will result in the loss of 10,000 jobs. And on the heels of news that Oracle will acquire Siebel Systems, the database giant added software maker G-Log to its portfolio.

Microsoft's restructuring plan--designed to streamline the company's decision-making process and improve product development--calls for a reorganization of the company into three large divisions led by individual presidents, each reporting to Steve Ballmer, Microsoft's chief executive.

Jeff Raikes will head up the company's Business division, which will house Microsoft's Information Worker group (which includes its Office product line), and its Business Solutions packaged applications group.

Kevin Johnson and Jim Allchin will be co-presidents of the Platform Products and Services division, which will comprise Windows Client, Server and Tools and the MSN division. Microsoft said Allchin will hold that new position until he retires, once the company ships Windows Vista at the end of next year.

And Robbie Bach will be president of the Entertainment and Devices division, which will oversee games and mobile device development.

The news had industry watchers sizing up Johnson, reflecting on Allchin's legacy, wondering what reorganization means for Microsoft, and questioning whether Google's expanding roster of Windows-free Web services may have been a factor in the shuffle.

CNET News.com readers also chimed in, some questioning whether the move might be more about shareholder unease than making the company more agile. Reader "Jack Sprat" said while the company might be doing some good in "shortening the line between the customer and the honchos at the top," he thinks the company is "doing anything they can to make some news; otherwise Google gets all the attention."

Reader Carl Johnson adds: "They're just rearranging the deck chairs on a sinking ship. With Balmer at the helm MS is doomed."

They're just rearranging the deck chairs on a sinking ship. With Balmer at the helm MS is doomed.
--Carl Johnson

Meanwhile, Sony employees will face layoffs with a restructuring plan calling for the closure of 11 plants, among other changes. The company will "eliminate the corporate silos" of its Sony Corporation Network starting Oct. 1 and replace it with a new structure that it hopes will allow for better coordination on product planning.

Sony, which has been facing financial losses and pressure from Samsung's LCD and plasma televisions and Apple Computer's iPod, said it expects to spend $1.8 billion on the restructuring. The company will be refocusing its efforts on electronics, televisions, digital imaging, DVD recorders and portable audio.

Because of the changes, Sony will report a financial loss of about $90 million on sales of $65.1 billion for the year, the company said. Sony previously said it would post a profit of $90 million.

The Oracle speaketh
Also nervous are Oracle customers, who this week learned the software maker is buying G-Log--a maker of logistics and transportation management software--marking Oracle's 10th acquisition in nine months. Last week the company announced it will acquire rival Siebel Systems in a megadeal worth $5.8 billion that better positions Oracle against archrival SAP.

The pace of acquisitions was on the minds of attendees at Oracle Open World, which took place this week in San Francisco. Some customers wondered if the new additions would get in the way of Oracle's focus on customers and technology.

In other conference news, Oracle chief Larry Ellison told reporters he hopes to double his company's revenue over the next few years. Ellison