A report by Bloomberg cites sources at Microsoft as saying that Chief Executive Steve Ballmer's leadership change will start be consolidating all of Microsoft's hardware products -- including Surface and Xbox -- under a single new unit, which would be headed by Windows chief Julie Larson-Green.
The Xbox unit (formally the interactive entertainment division) had been left leaderless after Don Mattrick, its former chief, jumped ship to become CEO of Zynga Inc. (ZNGA). Some reports suggested Mr. Mattrick was fired for making comments about digital rights management (DRM) and the Xbox One. In an interview Mr. Mattrick had told gamers who didn't have 100 percent reliable internet to not buy an Xbox One, a suggestion many disgruntled gamers took to heart. Microsoft eventually backed down from that policy.
Microsoft's CIO Tony Scott also recently bailed, prior to the upcoming shakeup.
It is unclear whether Mr. Ballmer would then appoint a new Windows President, or if Ms. Larson-Green would fill both slots. One source says that Terry Myerson -- the current Windows Phone chief -- will likely be put in charge of all operating system development, including desktop Windows. That move would likely mean a continuation of Microsoft's "Metro" (aka Modern UI) assault on the desktop/laptop market, much to the chagrin of critics of that design direction.
Marketing for various units (Windows, server, hardware, etc.) would also be consolidated into a single unit, which would be headed by Tami Reller, who currently is marketing chief for just the Windows unit. Another shift from a financial perspective would be that the chief financial officers (CFOs) of the new units would report directly to company CFO -- Amy Hood -- versus the current situation the CFOs the present units report to their unit chief.
A final new unit would be tasked with managing acquired/merged-in businesses and with wooing developers. That unit will be headed by Skype president Tony Bates.
Sources say the exact roles are still being finalized and may be shuffled before an official announcement comes. Overall the changes are designed to reposition Microsoft as a "devices and services" firm, Microsoft's long term vision. The shift towards first party hardware and cloud services would make Microsoft look a lot more like Apple, a radical shift for a company that started off with a narrow focus on software.