Microsoft phases out Internet group, focuses on enterprise

Microsoft has reorganised its structure to reflect its focus on enterprise computing, and de-emphasise the separateness of Internet technology and the Windows operating system. The company's Internet Client and Developer Relations groups, which were under the former Applications and Internet Client Group, have been moved under the wing of the Personal and Business Systems Group, which produces Windows 9x and Windows NT. That group is led by Senior Vice President Jim Allchin. Despite the appearance of a possible link between the realignment and Microsoft's ongoing legal battle with the US federal government -- which accused Microsoft of tying Internet Explorer to Windows 95 -- officials insisted that the timing had nothing to do with the antitrust case.

Microsoft has reorganised its structure to reflect its focus on enterprise computing, and de-emphasise the separateness of Internet technology and the Windows operating system.

The company's Internet Client and Developer Relations groups, which were under the former Applications and Internet Client Group, have been moved under the wing of the Personal and Business Systems Group, which produces Windows 9x and Windows NT. That group is led by Senior Vice President Jim Allchin.

Despite the appearance of a possible link between the realignment and Microsoft's ongoing legal battle with the US federal government -- which accused Microsoft of tying Internet Explorer to Windows 95 -- officials insisted that the timing had nothing to do with the antitrust case.

"We want achieve an organisational focus around Bill's [Gates'] two business initiatives: the digital nervous system and the Web lifestyle," a Microsoft spokesperson said.

One analyst agreed that the move was related more to organisational issues than legal ones.

"Well before the US Justice Department case splashed across the headlines, Microsoft made it pretty clear it was pursuing tight integration with Windows 98 and Internet Explorer, and as the company's gotten larger, some groups don't coordinate as tightly as they should," said Dwight Davis, an analyst at Summit Strategies, in Boston, who has followed the company for years.

"It looks like they're trying to do organisationally what they haven't been able to prove technically" -- that Windows and Internet Explorer are inseparable, Davis added.

Bob Muglia, who was vice president of Microsoft's Server Application group, was promoted to senior vice president of the Application and Tools Group. Muglia will oversee Office, BackOffice, developer tools, and Web authoring tools.

Senior Vice President Brad Silverberg, a member of Gates' Executive Committee who headed up the Internet client group that is being folded into platforms, has extended indefinitely the sabbatical he began last June.

"I plan to return to the company and will be working on various projects for Bill in the meantime, as well as staying in close touch with people from Microsoft," Silverberg, who was a key figure behind the release of Windows 95, said in an e-mail. "Basically, I enjoyed my sabbatical a lot and still have some things to get out of my system before I'm ready to return. I have always been passionate and committed to my work. When the right position opens up, one that I can be passionate about and committed to, I would return."

Still, many wondered why Microsoft created the Internet division.

At Microsoft's famous Dec. 7, 1995, Internet event, Gates said that Web technology was so vital to every aspect of Microsoft's operations that there would not be a separate division. Just two months later, though, Microsoft created the Applications and Internet Client Group.

The reorganisation also saw the Developer Relations Group move to Allchin's division. Brad Chase, who was vice president of developer relations marketing, now will head up the Personal and Business Systems Group's marketing, and another vice president in that group, David Cole, moved to consumer-oriented development.

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