Week in review: Microsoft mixes it up

Software giant announces major reorg and Jim Allchin's future retirement. Also: Reshuffling news from Sony and Oracle.

Michelle Meyers
Michelle Meyers
Michelle Meyers wrote and edited CNET News stories from 2005 to 2020 and is now a contributor to CNET.
5 min read
Microsoft this week announced a sweeping reorganization of the company into three new divisions, a shift that will lead to the retirement of longtime Windows development chief Jim Allchin.

But the software giant wasn't the only one mixing it up this week, as the Gulf Coast braced itself for yet another major hurricane. Sony announced a restructuring plan that will result in the loss of 10,000 jobs. And on the heels of news that Oracle will acquire Siebel Systems, the database giant added software maker G-Log to its portfolio.

Microsoft's restructuring plan--designed to streamline the company's decision-making process and improve product development--calls for a reorganization of the company into three large divisions led by individual presidents, each reporting to Steve Ballmer, Microsoft's chief executive.

Jeff Raikes will head up the company's Business division, which will house Microsoft's Information Worker group (which includes its Office product line), and its Business Solutions packaged applications group.

Kevin Johnson and Jim Allchin will be co-presidents of the Platform Products and Services division, which will comprise Windows Client, Server and Tools and the MSN division. Microsoft said Allchin will hold that new position until he retires, once the company ships Windows Vista at the end of next year.

And Robbie Bach will be president of the Entertainment and Devices division, which will oversee games and mobile device development.

The news had industry watchers sizing up Johnson, reflecting on Allchin's legacy, wondering what reorganization means for Microsoft, and questioning whether Google's expanding roster of Windows-free Web services may have been a factor in the shuffle.

CNET News.com readers also chimed in, some questioning whether the move might be more about shareholder unease than making the company more agile. Reader "Jack Sprat" said while the company might be doing some good in "shortening the line between the customer and the honchos at the top," he thinks the company is "doing anything they can to make some news; otherwise Google gets all the attention."

Reader Carl Johnson adds: "They're just rearranging the deck chairs on a sinking ship. With Balmer at the helm MS is doomed."

Meanwhile, Sony employees will face layoffs with a restructuring plan calling for the closure of 11 plants, among other changes. The company will "eliminate the corporate silos" of its Sony Corporation Network starting Oct. 1 and replace it with a new structure that it hopes will allow for better coordination on product planning.

Sony, which has been facing financial losses and pressure from Samsung's LCD and plasma televisions and Apple Computer's iPod, said it expects to spend $1.8 billion on the restructuring. The company will be refocusing its efforts on electronics, televisions, digital imaging, DVD recorders and portable audio.

Because of the changes, Sony will report a financial loss of about $90 million on sales of $65.1 billion for the year, the company said. Sony previously said it would post a profit of $90 million.

The Oracle speaketh
Also nervous are Oracle customers, who this week learned the software maker is buying G-Log--a maker of logistics and transportation management software--marking Oracle's 10th acquisition in nine months. Last week the company announced it will acquire rival Siebel Systems in a megadeal worth $5.8 billion that better positions Oracle against archrival SAP.

The pace of acquisitions was on the minds of attendees at Oracle Open World, which took place this week in San Francisco. Some customers wondered if the new additions would get in the way of Oracle's focus on customers and technology.

In other conference news, Oracle chief Larry Ellison told reporters he hopes to double his company's revenue over the next few years. Ellison

said his game plan is to grow the software giant from a nearly $15 billion company to a $30 billion behemoth over the next few years--and to do so at a pace that maintains a 40 percent operating margin.

He also told customers that engineering rather than deal-making will be Oracle's top priority over the next two years as the company prepares for an increasingly competitive business applications market, reassuring them that the company does not "have any other large acquisitions in mind" after the company's planned takeover of Siebel.

Name that worm
In order to reduce the confusion caused by the different names security companies give worms, viruses and other pests, the U.S Computer Emergency Readiness Team next month plans to take the wraps off the Common Malware Enumeration initiative.

The project assigns a unique identifier to a particular piece of malicious software. When included in security software, alerts and virus encyclopedia entries, this identifier should help people determine which pest is hitting their systems and whether they are protected, the initiative's backers said.

Meanwhile, Mozilla has released an update to Firefox to fix several serious security flaws, including a recently disclosed bug that could let attackers secretly run malicious software on PCs.

Firefox 1.0.7 was issued late Tuesday, a Mozilla representative said. A new Mozilla Suite 1.7.12, containing the affected Mozilla Web browser and other tools, was to follow by the end of the week.

In other Mozilla news, a report from security vendor Symantec found that Mozilla Web browsers are potentially more vulnerable to attack than Microsoft's Internet Explorer, but hackers are still focusing their efforts on IE.

Some readers were a bit skeptical of the findings. Jay Talbot, for example, read through the report and said it was incomplete because it only looked at "vendor confirmed" vulnerabilities.

"We all know how M$ doesn't like to hang their dirty laundry out for everyone to see, at least until it's too late," he wrote. "Just because more vulnerabilities are caught, and repaired, doesn't make a piece of software insecure. What makes it insecure are the ones that aren't caught in time, and it's too late."

Symantec, which has agreed to acquire privately held WholeSecurity, also reported this week that more computers in the Asia-Pacific region are being hijacked and used remotely by hackers to send viruses.

Gizmo me
Demofall, which took place this week in Huntington Beach, Calif., is a rare breed of a technology conference. By limiting presenters to six minutes, it gives those on hand a unique chance to see dozens of the latest innovations in a short period of time.

One that stood out was Destinator Anywhere Server, which is a mix of services like Yahoo Local and mobile phones incorporating GPS (Global Positioning System). The idea is that the phone becomes a portable version of the little digital boxes--now offered by many car rental companies--that direct drivers to their locations by spouting vocal commands on when to turn left, right or go straight for another quarter-mile.

Also at the conference, Mark Heesen, president of the National Venture Capital Association, told fellow venture capitalists that despite some bad economic signs, the time is ripe for a new cycle of investment, even if the size of funds has dropped significantly since the bubble burst on the Internet boom.

Also of note
Microsoft's radical Office 12 overhaul, due next year, aims to counteract "feature creep"...Google's network gives it a chance to rival Microsoft, according to a recent book...Do innovations and new technologies make us more intelligent?...Researchers have come up with a way to block secret digital cameras ...The Authors Guild filed a lawsuit against Google alleging "massive" copyright infringement...More couples are using digital music players for their weddings...All eyes are on Hurricane Rita, and Hurricane Katrina cleanup continues.