As dramatic as the recently announced Microsoft reorganization is I think it likely that many core aspects of the company’s culture remain.  In particular, while the centralization of product marketing should give it more coherence and top-level strategy influence the center of product power in the company remains the heads of its engineering units.

The Engineering EVPs will retain the primary ownership of Strategy for their segment.  They also retain the Program Management function, which amongst other things, owns Product Requirements, driving release definition, and coordinating amongst the various teams and groups within and across organizations.  Ownership of Product Requirements by Program Management, as opposed to by Product Management, is one of the distinguishing characteristics of Microsoft that sets it apart from many other companies.

From an operating standpoint I doubt the engineering groups at Microsoft will feel much difference with the new structure.  Keep in mind that historically, with short periods of exception, product marketing has not reported to the leader of individual products.  It has primarily been centralized at the level of divisional Senior Vice President or higher who owned several products.  Go back to the 90s and structurally it would have looked much as it did a few weeks ago where marketing for an entire business unit reported to the President.  There was perhaps 1 year in the last 20 where SQL Server Marketing reported to the head of SQL Server, as an example.  The rest of the time it reported to the head of Developer Division (when that was a top-level division that SQL Server was part of), or Server Application Division, or Server and Tools Business, or whatever other “bigger” structure my brain has forgotten the name of.  So the majority of Microsoft executives, including the GMs and CVPs, are used to not having direct control of their own marketing teams.

What is different now is that Product Marketing has its own seat at the table in Senior Leadership Team (if they still call it that) discussions.  And Tami has the opportunity to eliminate many of the business-oriented seams between products that drive customers absolutely nuts.  She can also focus efforts on cross-product business strategies, such as the BI example I described in an earlier post, to help force the different engineering groups to bring a coherent solution to market.  Marketing’s influence, both politically and operationally, goes up.  But this is not a fundamental shift away from an engineering-driven culture to a marketing-driven culture.

To give you a concrete example of a place where this reorg could help let me focus on one of my efforts at Microsoft.  I was tasked, at the behest of two SLT members, with shepherding a technology that both were huge fans of.  Besides my personal involvement I eventually had an engineering team with about 100 people working in the technology space.  Unfortunately the revenue, and thus the primary marketing responsibility, accrued to a third SLT member who did not consider the technology a priority.  So while marketing from all sides participated in virtual team efforts to create a plan, when it came time to execute that plan no resources were made available.  The marketing team supporting my organization couldn’t devote the resources for something that yielded them no revenue.  The marketing team for the organization that did accrue the revenue had been handed marching orders that precluded them allocating resources to it.  Attempts to force the issue eventually ran into the limits of the organizational structure then in place.  100+ engineers, 0 marketing.  We ended up with engineers handling some of the non-optional marketing duties, but otherwise the effort just did not receive the attention called for.

In the new structure Tami becomes the eventual arbitrator of the situation I lived through.  She doesn’t get to say “that’s the other marketing group’s problem”.  Instead she can decide which group, independent of revenue allocation, should assign resources.  And if she decides that the effort should not have marketing support, then she can also be the voice at the SLT saying “why are you wasting 100 people on something that is not important to the business”?

Does this mean that all will be perfect?  No.  It is still entirely possible that engineering will want to invest 100 people in something that is strategically important even if it has little short-term business impact and thus little marketing support.  What it means is that the odds of rational decision making and clarity of decisions goes way up.  And there is someone, beyond Steve of course, who gets to take the view “what is best for Microsoft’s customers/business” rather than “what is best for my product’s customers/business”.

There are many other dynamics that keep Microsoft an engineering-driven culture, most of which I won’t dive into here.  But just for one example, engineering teams hire for long-term subject area expertise.  For college hires the SQL Server team, for example, targets graduates of the schools with top database programs like UW Madison.  And it seeks out people with decades of database experience working for competitors.  And then it retains them in the database, or at least broader storage, discipline often for their entire career.  Senior engineers and engineering management from every significant database player have been part of the SQL Server organization.  The recently hired head of SQL Server development arrived with decades of database experience at DEC, Sybase, and SAP.  Meanwhile over the last two decades Microsoft has never hired a career database marketing person to head SQL Server marketing.  That’s not to say they haven’t hired good marketing people, just that they don’t generally have the subject matter expertise (or longevity in role) to have long-term strategic product impact.

If you wanted my biggest concern about the new marketing structure I think I just revealed it.  If marketing people were considered fungible and not tied to specific products in any long-term way before, then being in an organization without ties to a specific product area will only enhance that situation.   Marketing at Microsoft just took a giant step towards better coherence of business and marketing strategy, but perhaps also a significant further step away from being able to influence individual product strategy or details.  All models are flawed, some models are useful….