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Tag: restructuring

  • Microsoft’s New Windows Strategy Is Full Of Potential, But It Could Easily Backfire

    For a while now, it’s been rumored that Microsoft was planning a massive internal restructuring that would turn it into a devices and services company. What that means is that Microsoft would be more like Apple in that it creates hardware to deliver its services to consumers. In a memo released today detailing said restructuring, Microsoft CEO Steve Ballmer gave some hints as to what his company’s future hardware would look like.

    Near the beginning of the memo, Ballmer says that the future will be defined by Windows devices that power work and play. He also gives some examples as to what those devices might look like:

    Building upon Windows, Xbox and our growing suite of consumer and enterprise services, we will design, create and deliver through us and through third parties a complete family of Windows-powered devices — devices that can help people just as much in their work life as they do after hours. Devices that help people do more and play harder.

    We will strive for a single experience for everything in a person’s life that matters. One experience, one company, one set of learnings, one set of apps, and one personal library of entertainment, photos and information everywhere. One store for everything. Microsoft has the clear opportunity to offer consumers a unified experience across all aspects of their life, whether the screen is a small wearable, a phone, a tablet, an 85-inch display or other screens and devices we have not yet even imagined.

    Did Ballmer just say that Microsoft is working on a smart watch? He said “small wearable,” but that pretty much means smart watch. Of course, he could also be referring to something like Google Glass, but current rumors suggest Microsoft is going to take another stab at the smart watch market again in the near future.

    Just as an aside, I would like to see what Ballmer is thinking by referencing an 85-inch display. Does that mean the company wants to get into the smart TV market? The Xbox One will kind of turn TVs into smart TVs, but I wouldn’t be surprised if the company introduced an Xbox branded set-top box that brought a Windows 8 flair to the television.

    The idea of work and play is brought up again later on as Ballmer says that “no technology company has as yet delivered a definitive family of devices useful all day for work and for play.” To that end, he says that Microsoft will combine “software, services and hardware to bring the consumer this new, more complete and enveloping experience.”

    So, how is Microsoft going to merge fun and play through its devices? Ballmer says it’s all about variety:

    Our family will include a full spectrum of both partner and first-party devices. We believe we need all of these categories to drive innovation, fulfill market desire for diversity of experience, and achieve volume.

    Our family will include phones, tablets, PCs, 2-in-1s, TV-attached devices and other devices to be imagined and developed. No other company has such strength across so many categories today, and yet this strength is essential to being relevant and personal throughout people’s lives. Our devices must share a common user-interface approach tailored to each hardware form factor. They must deliver experiences based on a common set of services such as the same account login or a common understanding of people and their relationships. They need to share the same services infrastructure so that the information an individual has shared on one device can be available and carry across all the devices in the family. Our devices must support the same high-value activities in ways that are meaningful across different device types. Developers must be able to target all our devices with a common programming model that makes it easy to target more than one device.

    By far, the most interesting concept here is the idea that the future of Windows is a common kernel for developers to target all devices with one build. The company already made development between Windows Phone 8 and Windows 8 easier by sharing the kernel between the two, and it will be doing something similar by allowing developers to build Windows applications for the Xbox One. It sounds like Microsoft would like to take this further by making it possible to build an application for Windows 8, and that app will run on Windows Phone 8 and Xbox One without any further work.

    Ballmer sums up his aspirations perfectly when he says that Microsoft “will develop the only ecosystem that promotes variety in hardware but coherence in the user experience.” In other words, it won’t matter what hardware you use in the future as long as it has Windows. From there, Microsoft will take care of everything else.

    If this all seems kind of familiar to you, you’re not alone. Microsoft is obviously taking the Apple approach to hardware going forward, but it has the potential to be so much more. If Ballmer and company can pull this off, Windows could once again be synonymous with computing. It could also horribly backfire as Ballmer’s plan is contingent upon consumers buying nothing but Windows devices. Convincing people to own nothing but Windows products is going to be hard part; but once they do, it could be a game changer for consumers and developers.

  • Microsoft Restructuring Plan Could be Unveiled on Thursday

    Earlier this month, Microsoft’s Don Mattrick, president of the Xbox division, left the company to become the CEO of struggling mobile game developer Zynga. The move was quite sudden, with Microsoft left leaving CEO Steve Ballmer in charge of this fall’s launch of the new Xbox home console, the Xbox One.

    Though the reasons for Mattrick’s departure were the subject of much speculation, one rumor that was repeated often was that he had left just before a massive executive restructuring effort was to take place at Microsoft. This week, reports are surfacing that the restructuring plan may go into effect sooner rather than later.

    All Things D is reporting that Ballmer will unveil his executive restructuring plan on Thursday. Citing unnamed “sources close to the situation,” the report states that the reorganization will center on services and hardware for business and consumers. Another rumored part of the plan is to eliminate redundant groups within the company and place efforts into a fewer number of more important products.

    The rumors have, understandably, caused a stir within the higher-ups at Microsoft. As reported last week by Bloomberg, Skype CEO Tony Bates is rumored to be promoted to head of an acquisitions and developer outreach branch at the company, while Julie Larson-Green, the current head of the Windows division, could be put in charge of all hardware at the company. Other big moves could include Qi Lu running an online services division, which would include Bing and Office, and a marketing shuffle could leave Windows marketing head Tami Reller with a larger role at the company.

    (via All Things D and Bloomberg)

    (Image courtesy The CBI under Creative Commons license)

  • Hewlett-Packard to Cut 2,000 More Jobs Than Previously Stated

    Hewlett-Packard (HP) announced today that it would cut 2,000 more jobs than it originally reported back in May. This brings the total planned layoffs up to 29,000 by the end of fiscal year 2014.

    According to a Bloomberg report, a regulatory filing today revealed the increased number of layoffs. Back in May, HP announced that it had begun a restructuring program, of which the tens of thousands of layoffs (8% of its entire workforce) are a large part. The company estimated that the program will save $3-$3.5 billion annually by the end of 2014.

    This news comes on the same day that HP announced a new lineup of enterprise security solutions. A new focus on cloud security and information analytics is part of HP’s restructuring program.

    Even so, its enterprise services were devalued in August, when the company wrote off $8 billion from the value of Electronic Data Systems (EDS), an IT services company HP bought in 2008 for $13.9 billion. Since that acquisition, HP has faced the growing competition and rapid industry change that many aging technology manufacturers have seen. HP’s stock has reflected this, falling over 30% this year, according to Bloomberg.

    HP has not announced the reason for the increased number of layoffs. At the IFA trade show in Berlin two weeks ago, HP announced a new series of Windows 8 ultrabooks and a Hybrid tablet/PC called the HP ENVY x2

  • Google Axes Motorola Mobility Branch In Israel

    Google announced last week via SEC form 8K that it would be eliminating 4,000 jobs from the recently acquired Motorola Mobility, and close a third (about 30) of its facilities.

    “These changes are designed to return Motorola’s mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters,” Google said in the filing. “That said, investors should expect to see significant revenue variability for Motorola for several quarters. While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability.”

    The restructuring has begun, starting with Motorola’s office in Netanya being shut down, and 30 employees from the location losing their jobs, according to Israel’s Globes (via TNW).

    The publication obtained a statement from Motorola Mobility, saying, ”We are closing the local branch, and the employees will not remain at the company.”

    It should only be a matter of time before we see similar reports about other locations. Read the SEC filing here.

    Google acquired Motorola Mobility earlier this year for $12.5 billion.

  • HP to Report Quarterly Loss of Over $8 billion

    HP hinted today that it expects to report the third quarter of 2012 as its largest-ever quarterly loss. The losses, which total more than $8 billion, are the affect of a restructuring program and a services goodwill impairment charge of around $8 billion.

    The $8 billion charge stems from the acquisition of IT services company Electronic Data Systems (EDS). When HP acquired EDS in 2008, it paid $13.9 billion for the company. HP added billions of dollars worth of goodwill to its ledgers as a result of the deal. Goodwill, in accounting terms is the value a company has beyond the value of its assets. The value of EDS has not held, and HP has been forced to take an $8 billion hit in value.

    As for HP’s massive restructuring, the costs of that program will run the company a pre-tax charge of $1.5 to $1.7 billion. The company states that costs stem from “a higher than anticipated acceptance rate under its early retirement program and faster than expected implementation of the workforce reduction program.”

    Among this financial news, HP also announced changes to its senior management. HP will be replacing John Visentin, the head of HP’s Enterprise Services division with HP Enterprise Services General Manager Mike Nefkens, who will head the division on an acting basis. HP Enterprise Services Chief Financial Officer Jean-Jacque Carhon was also appointed to the role of of COO for the Enterprise Services division.

    Hardware manufacturers may face more challenges in the future, as software makers begin to sell their own hardware. Emulating the success of the Apple ecosystem, Google has begun selling its Nexus line of devices, and Microsoft announced its own laptop/tablet hybrid Surface.

  • RIM Trims the Fat with Substantial Job Cuts as they Struggle to Stay in Business

    Research in Motion (RIM) has been struggling for awhile, and has definitely lost its foothold in the marketplace giving way to increasingly popular iOS and Android devices.

    While their BlackBerry line was once considered an enterprise communication standard, they are now struggling just to stay in business.

    The Wall Street Journal reported yesterday, that RIM has already been proactive in cutting their workforce in order to reduce costs and make way for a much need reorganization of operations.

    The cuts are being made in the quality controls department, parts, and operations. According to inside sources, the layoffs have been taking place in batches of up to ten employees at a time. RIM also saw the resignation of many top executives in early April, just after they announced a less than stellar quarterly earnings report.

    The latest job cuts come after reducing their workforce by over 2000 people just before the beginning of 2012. In March, they still employed over 16,000 people, but it is unclear where that number stands after this last round of layoffs.

    Despite the challenges the company faces, they insist they are not abandoning the consumer market, and they plan to introduce a newly redesigned BlackBerry by the end of this year.

    So, while the fate of BlackBerry and RIM hangs in the balance, they continue to struggle and lose employees left and right. Hopefully we’ll see something come out of these job cuts and RIM will emerge as a leaner, meaner business machine.

    There’s definitely room for more competition on the smartphone and device marketplace, but the question is, does RIM have what it takes to deliver where others can’t? We’ll keep you updated as RIM struggles to reorganize and reduce their overhead.