Terry Myerson, Microsoft Executive Vice President of the Windows and Devices Group speaks about Microsoft's Windows 10 "Creators Update" at a live Microsoft event in the Manhattan borough of New York City, October 26, 2016.
The driver behind the move is the forthcoming departure of Terry Myerson, a 21-year Microsoft veteran who serves as executive vice president of the Windows and Devices Group.
The reorg includes the creation of two large new engineering groups inside Microsoft, focused on Experiences & Devices, led by Microsoft Office head Rajesh Jha; and the company's Cloud + AI Platform, led by Microsoft's cloud and enterprise chief Scott Guthrie.
Microsoft has launched another major restructuring that will see the software giant focus its efforts less on the Windows operating system, and more on the cloud and AI going forward.
Nadella said that with this change comes transition, and he revealed that Terry Myerson is leaving Microsoft.
A new team, dubbed AI Perception & Mixed Reality, to be led by Alex Kipman, a Microsoft Technical Fellow and the inventor of the Kinect and HoloLens devices. CEO Satya Nadella sent an email to all Microsoft personal to let them know of the upcoming changes. Myerson's departure without a supporting statement may indicate there was a clash between Myerson and Satya Nadella in the direction of Windows.
The reorganization is "really doubling down on the cloud as the fundamental platform for Microsoft", said Ed Anderson, an analyst at Gartner.
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"Having a chief product officer is an indication that the company is leaning more into hardware products, not backing off", he told SiliconANGLE.
"Joe Belfiore will continue leading our Windows experiences and will drive Windows innovation in partnership with the PC and device ecosystem", Nadella wrote. Jason Zander is being promoted from corporate vice president to executive vice president of Azure. The team will be zeroed in on Microsoft's mobile offerings, Windows, and its Microsoft 365 productivity suite for the most part.
The other part of the Windows team, dealing with the operating system will be merged into a new "experiences and devices" group. It will be responsible the development of Azure and the company's rapidly growing portfolio of artificial intelligence tools, a good portion of which are hosted on the cloud platform. AI + Research will remain a separate, third engineering team under Harry Shum.
Scott Guthrie, now president of the Microsoft Corp.
AI Ethics Group Nadella also announced the formation of a new committee charged with navigating the legal and ethical issues resulting from advances in AI.
"We'll talk more about these changes at the Q&A next week and the important work ahead", Nadella said.