The Takeaway: Elop out as Nadella shakes up Microsoft’s executive team

Microsoft has reshuffled its executive ranks, getting rid of former Nokia chief Stephen Elop and handing more responsibilities to Windows head Terry Myerson. The company also cut back on the number of major engineering divisons it has, moving from four to three.

CEO Satya Nadella in a statement released today — and in comments echoed in an email he sent to Microsoft employees — said the changes are designed to “better align our capabilities and, ultimately, deliver better products and services our customers love at a more rapid pace.”

Elop had run the company’s Devices team following his return to Microsoft after it bought Nokia for $7.9 billion. That deal that was finalized just last year. Elop’s former group will now come under Myerson’s direction. (Myseron will continue to run the company’s Operating System group.)

Here’s how some of the changes unveiled today shake out:

• Myerson’s new group will be called the “Windows and Devices Group,” or WDG for short and, according to Nadella, will pull together “the engineering capability required to drive breakthrough innovations that will propel the Windows ecosystem forward.”
• Several top-level execs will depart as the result of today’s changes: Eric Rudder, vice president of advanced technology and education, and a 25-year veteran of the company; Kirill Tatarinov, who was running Microsoft’s Dynamics group; and Mark Penn, the one-time political advisor who has been with Microsoft since 2012 and oversaw the anti-Google “Scroogled” campaigns.
• Kurt DelBene, who was pushed aside two years ago during the big reorganization by then-CEO Steve Ballmer but brought back by Nadella in April, will remain in place as the head of corporate strategy and planning.

The new WDG operation marks a return to how Microsoft organized engineering efforts after the launch of its Surface and Surface Pro tablets three years ago. But its sheer size could be a problem, said Patrick Moorhead, principal analyst at Moor Insights & Strategy. “That’s a massive group,” he said. “I think it might almost be too big to manage.”

Rob Helm, an analyst at Directions on Microsoft, said the changes will bolster the company’s hardware push: “I think this underlines the fact that Microsoft’s hardware business is going to be the first and best customer of Windows.”

With reports by Gregg Keizer at Computerworld