Tomorrow Steve Ballmer is expected to announce a major reorganization of Microsoft, but that's really only a sideshow to the company's real underlying challenge: How to create great products that people want. It's not at all clear the reorganization will help with that.
Rumors of what the reorganization will bring have already leaked. It's expected that hardware engineering for all devices, from Surface tablets to the Xbox and beyond, will be consolidated into one division, overseen by current Windows chief Julie Larson-Green.
All Windows products, including Windows Phone, desktop and tablet OSes are said to be combined in a single division, under current Windows Phone software chief Terry Myerson.
A division made up of online "applications and services engineering," including Skype, Bing and Office, is expected to be overseen by Qi Lu, president of Microsoft's Online Services Division.
Current Skype President Tony Bates is slated to head all acquisitions and relationships with software developers. The restructuring is also expected to "separate product engineering from business functions like marketing and finance, which will get their own groups," according to Bloomberg.
There's a good deal of logic to all that. But logic doesn't build great products. In fact, logic can get in the way of building them. Microsoft used a certain kind of business logic when it designed and built Windows 8, for example. It figured that it could use Windows as a way to jump-start its struggling phone and tablet strategy. The idea was to have Windows 8 have the same interface as Microsoft's phones and tablets. In that way, people would get used to the interface, and then want to buy Microsoft's phones and tablets because they used the same interface.
Things didn't turn out quite that way, for a simple reason: Windows 8 is a kludge, an unsuccessful Rube Goldberg mashup of a traditional operating system and a mobile operating system. It simply isn't a great product, or even a particularly good one.
Steve Jobs was well-known for thinking that in order to succeed, you didn't ask people what they wanted -- instead, you built great products, and when people saw them, they'd know that's what they wanted.
Microsoft needs to think that way, too. Unless this reorganization facilitates that, the restructuring won't work. The company needs to hire and keep creative people, turn them loose, free them from turf wars, and let them built great products.
So while the reorganization expected tomorrow is a big step, it's really only a sideshow to the real issue: Can Microsoft build great products that people crave?