Microsoft announced Friday three new appointments to head key divisions. In the most prominent appointment, Kurt DelBene has been named president of its Office division, a promotion from his previously position as head of the engineering and development teams in the business division.
The Office division accounts for about a third of the company's annual revenue of about $16 billion. Total revenue for the unit grew 15 percent in the quarter ended June 30, and operating income increased 20 percent.
DelBene, 50, has been with the Redmond, Wash.-based software giant for 18 years, and his team was behind the development of the recently launched Office 2010 products and services. In his new role, DelBene will be responsible for both the engineering and marketing functions for Office, Exchange, SharePoint, Lync, Project, Vision and the company's speech technology.
Andy Lees, Don Mattrick
DelBene replaces Stephen Elop, who recently became the chief executive at Nokia.
At the same time, Microsoft appointed Andy Lees as president of the communications business. A 20-year Microsoft veteran, the 45-year-old Lees was previously senior vice president of the division, and he oversaw the development of Windows Phone 7.
Don Mattrick was named president of the interactive entertainment business. He was senior vice president as the installed base for the Xbox 360 grew to 42 million owners worldwide and more than 25 million Xbox Live users. Mattrick will also be responsible for Kinect, Zune music and video, and PC and mobile interactive entertainment.
"Today's promotions underscore the strength of Microsoft's collective leadership team," CEO Steve Ballmer said, "and set us up well to execute against a powerful lineup of products this fall."
Ballmer added that "not only is the team ready to capitalize on major momentum with our existing products like Office, SharePoint and Halo: Reach, but they are simultaneously bringing entirely new experiences to market with Windows Phone 7 and Kinect for Xbox 360."
Ballmer's references to "major momentum" and "entirely new experiences" reflect the company's effort to overcome some major challenges. On the Office front, Google in particular has compelled Microsoft to adapt its crown jewels into online versions, while many businesses and individuals are looking for reasons why they need to update their existing Office apps.
In mobile, most observers agree that the company dropped the ball with Windows Mobile, losing market share and momentum to Apple's iOS and Google's Android devices in particular. The new Phone 7 is an attempt to get back into that game, a space in which the company must play since the center of gravity for computing has moved to mobile devices.
And in games, the company is hoping its new hands-free controller, Kinect, and increasingly active Xbox Live will give it momentum to continue competing with Nintendo's family-pleasing Wii and Sony's PlayStation.