On paper, this makes plenty of sense. But business isn't conducted on paper. It's conducted in the real world. And only that will tell whether the reorganization can work. Will turf wars really be reduced? Will people in Microsoft be able to focus on building the best products possible, even if that means stepping on the toes of another division?
And above all, will this let Microsoft create compelling products that people simply have to have? That's why Apple and Google have succeeded so well, because of their product vision, not because of well-designed corporate structures.
Ultimately, it all comes down to Ballmer. If this reorganization will let him harness the collective creativity inside Microsoft and build great new products, it will be a big success. But if not, I expect it to be Ballmer's last stand.
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