Two of Microsoft’s highest-profile executives are leaving, and Apple’s running rings around the company is partly seen as the reason.
Robbie Bach and James J Allard, leaders of Microsoft’s Entertainment & Devices Division, are both leaving and will not be replaced. It is Microsoft’s biggest management shakeup in years. The retructuring will put CEO Steve Ballmer in direct charge of Microsoft’s consumer-focused mobile businesses, which are getting a kicking from Google, Nintendo and especially Apple.
In fact, Venture Beat’s Dean Takahashi, who wrote a pair of books about the Entertainment & Devices Division (Opening the Xbox and The Xbox 360 Uncloaked), says the inability to compete with Apple is behind the shakeup:
Allard’s last project at Microsoft was Courier, which Ballmer canceled earlier this year. It was viewed as an attempt to take on the Apple iPad. While Bach’s division is profitable now, it may be remembered for its inability to take on Apple in the increasingly critical mobile business. And that may explain why, any day now, Apple’s market capitalization is going to become bigger than Microsoft’s.
UPDATE: Horace Dediu has a good guess why Bach was fired: he lost Hewlett Packard when the company bought Palm. “Bach lost a key account; in fact, he could be responsible for having lost the biggest account that Microsoft ever had. Ballmer is a sales guy and he knows the importance of these relationships. A customer like HP must be managed carefully and their strategy must be steered to fit with yours. If HP felt they needed to go somewhere else for their mobile OS, it’s a slap in the face, but if they buy the asset and IP and internalize a competing platform, then that is a dagger to the heart for Ballmer.”