In a move that reveals a lot about Microsoft’s future direction the software giant has restructured its financial reporting mechanism to reflect its identity as a mobile and cloud business.
The company has announced that it will reduce its reporting segments from five down to three core operating areas: Productivity and Business Processes, Intelligent Cloud and More Personal Computing.
The Productivity and Business Processes segment will reflect financial results from the Office and Office 365 products as well as Dynamics and Dynamics CRM Online.
Intelligent Cloud will gather results from Microsoft’s server products, including Windows Server, SQL, System Center, Azure and Enterprise Services.
And the More Personal Computing segment will reflect Microsoft’s ambitions in hardware, gathering results from sales of products like its Surface personal computers, Xbox consoles and smartphones.
A streamlined Microsoft
Microsoft CEO Satya Nadella is midway through turning the Microsoft battleship in a new direction that reflects a world where software pulsates through a myriad of devices and things.
He has been restructuring Microsoft, trimming the fat and reversing disastrous decisions like the acquisition of Nokia’s mobile division, which cost Microsoft US$7.5bn in losses.
But the biggest task at hand has been re-establishing Microsoft’s identity as a fast-moving innovator rather than a bloated corporate giant. And those kind of changes have to come from within.
Microsoft will announce its next set of financial results reflecting the new structure on 22 October and it will be interesting to see if they provide a more cohesive picture on Nadella’s progress.