I was suprised as anyone at today’s news that Terry Myerson was replacing Andy Lees as head of Windows Phone.  I don’t know if Steve Ballmer was dissatisfied with Andy, though I can see reasons (beyond the obvious) why he should be.  Or if the evolution of the former Mobile Communications Business into the Windows Phone Division over the last few years has made the job less of a match for Andy’s skills.  Or if Steve was faced with having an excess of senior executives in Windows Phone and a pressing need elsewhere.  Or if this was a prepatory step to merging the Windows Phone and Windows divisions.  Or all of the above.

Before taking over the Mobile Communications Business (MCB) Andy very successfully ran Marketing for Servers and Tools (STB).  Before that he held other marketing and sales roles at Microsoft.  I honestly found it a little odd that he was given ownership of MCB since he had no product experience, but Microsoft had entered a period in which Steve was favoring marketing leaders over engineering leaders for key product roles.

It took Andy a fairly long time to recognize that Microsoft’ mobile business was going down the wrong path and put in place the “Windows Mobile 7” reset that created Windows Phone.  It is this delay that allowed the iPhone to solidify its lead, and even more importantly allowed Android to enter and take overall market leadership.  Along the way the MCB business made numerous other mistakes, the biggest one of course being Kin.  MCB wouldn’t kill Kin because of commitments it had made to Verizon Wireless, yet by allowing Kin to ship in such a non-competitive state they undoubtedly damaged the relationship with Verizon every bit as much as if they’d cancelled it.  Meanwhile I don’t think there is anything they could have come up with that better said “Microsoft neither gets it nor is competent to build mobile devices”.    Also in the original plan Windows Mobile 6.x would continue life for a number of years after Windows Phone 7 launch in order to address market segments that WP7 did not target.  Somewhere along the way this plan was abandoned.  But in the meantime lots of effort was wasted (e.g., an app store that never amounted to anything, multiple attempts to get Over The Air updates to work, etc.) on a dieing business.  In another marketing gaffe they actually sort-of renamed Windows Mobile 6.5 to be Windows Phone.  I never got the point in doing that since they had a real sea-change coming with Windows Phone 7 (and all the premature naming could do was hurt that).  Fortunately people quickly forgot about the Windows Phone naming for Windows Mobile 6.5 and very quickly associated Windows Phone with Windows Phone 7 and later.  There are other things, but the point is that even as the Windows Phone 7 team moved forward strongly to correct the earlier mistakes of the Windows Mobile world the rest of MCB continued to bounce from large disaster to small.  And so Andy Lees gets to bask in the glow of Windows Phone 7’s (partial) success, but he also has to accept responsibility for all of MCB’s failures during his tenure.

Meanwhile if you take a look at MCB’s org structure over the years you see something interesting.  At the time of the WM7 Reset it consisted of an engineering team that would go on to build Windows Phone, a team devoted to Pink/Kin, a team devoted to mobile services for multiple platforms (including Symbian, iPhones, etc.), and a team devoted both to working with device makers and carriers as well as continued Windows Mobile 6 development.  Plus a marketing team of course.  Terry Myerson was brought in to run the Windows Phone team.  Shortly after Windows Phone 7 plans solidified the services organization was blown apart and moved under Terry, with a focus on services for WP7.  After Kin shipped it was cancelled and the remnants of that team were moved under Terry.  Windows Mobile 6 efforts soon ended.  I haven’t followed all the organizational changes, but I could certainly sense that frustration with things like NoDo update delivery (where Terry’s engineering team completed their work but then it was up to the ODM/Carrier team to drive the update delivery, and that turned into a disaster) would have led to Terry’s org taking over more responsibility for dealing with manufacturers and carriers.  And so Andy Lees had gone from presiding over a number of semi-independent activities related to mobile communications to presiding over a marketing team for Windows Phone on one hand and Terry running everything else about Windows Phone on the other.

In Microsoft’s evolving “functional” product group model there is no place for an overall engineering manager role such as the one played by Terry.  Take a look at the Windows organization as an example.  Program Management, Development, Test, and Marketing all report directly to Division President Steven Sinofsky.  IE ships separately and has its own owner, so a better generalization is to say that the Program Management, Development, and Test organizations all report in at the level of a shippable unit.  Well, with MCB having evolved to be purely a Windows Phone organization Terry’s role as just its engineering leader was (from an organizational philosophy standpoint) becoming superfluous.  The natural evolution had to be to force Terry out and have the functions report directly to Andy Lees, or to have Andy take on more or different responsibility with Terry becoming the full owner of Windows Phone.  The former didn’t make sense given Andy’s history, and the important role Terry has played in creating Windows Phone 7.  So Steve took the second approach, but rather than expanding Andy’s role he moved Andy into a different one.

It is very easy to imagine what Andy’s new role is going to be.  With a huge launch in 2012 for Windows 8 and Windows Phone 8, as well no doubt of related products, Microsoft could use a seasoned veteran to lead the multi-divisional launch efforts.  But beyond the launch it isn’t at all clear what Andy’s role might be.

With this change it also appears that Steve’s experiment with placing marketing and sales people in charge of product organizations has come to an end.  Recent appointments to President have come from the engineering ranks.  For example, Kurt DelBene for Office, Satya Nadella for STB, and now Terry Myerson is running Windows Phone (even if he isn’t a President).

Finally, with Windows Phone 8 likely adopting Windows 8 MinWin as its base, and phones and tablets being part of a continuum,  one could make a good argument that Terry and the Windows Phone organization should report to Windows President Steven Sinofsky.  And this change to Windows Phone leadership might just be a prepatory step for that change.  It certainly would explain not giving Terry the President title.