Microsoft bumps business apps group up hierarchy

Business Solutions group leader Doug Burgum will report directly to CEO Steve Ballmer

Microsoft Corp. is tweaking the organizational structure around its Microsoft Business Solutions group, announcing today that group leader Doug Burgum will now report directly to Microsoft CEO Steve Ballmer. The change gives the unit a more prominent position in Microsoft's hierarchy.

The company also expanded the responsibilities of Orlando Ayala, who last year vacated his position as its top sales and marketing executive to take charge of the company's small and midsize business sales, marketing and partnering efforts. Ayala will continue as senior vice president of Microsoft's Small and Midmarket Solutions group, but he will also serve as chief operating officer of the Microsoft Business Solutions group, the software maker said.

Both Burgum and Ayala previously reported to Jeff Raikes, Microsoft's group vice president of productivity and business services. With the new shuffle, Ayala's group will be part of Microsoft Business Solutions, and Ayala will report to Burgum.

The change is unlikely to affect customers and partners, but it signifies the importance Microsoft places on its growing enterprise applications business.

Microsoft's desktop applications are ubiquitous in the business world, but the company didn't traditionally compete in the market for the expensive, complex ERP and CRM systems used for back-office functions.

Attracted by the growth opportunities of the market, particularly among smaller businesses, Microsoft cannonballed into the space several years ago, spending $1.1 billion to buy ERP maker Great Plains Software Inc. and another $1.3 billion on Danish software company Navision. Microsoft combined the two companies to form the foundation of its Microsoft Business Solutions group, which operates out of Great Plains' former headquarters in Fargo, N.D.

Microsoft inherited a large customer base from Navision and Great Plains, but the Business Solutions group's sales haven't been up to expectations in recent quarters. Executives blamed execution problems on the group's work with its channel partners and said a turnaround is expected soon.

The company still has high hopes for the business applications market: Ballmer predicted that the Microsoft Business Solutions group will be doing $10 billion in annual sales within a decade.

Copyright © 2004 IDG Communications, Inc.

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