The division combines Microsoft's existing Consulting Services and Product Support Services, a move the company hopes will simplify the way it provides services.
Robert McDowell, a Microsoft veteran, was tapped as the company's vice president of worldwide services.
In recent months, Microsoft has introduced several new Web-based software and services plans, all falling under its .Net push. Microsoft's .Net plan is aimed at making the company's existing software available over the Web to traditional PCs and to new, increasingly popular devices such as cell phones and personal digital assistants.
The company hopes the new division will provide the consulting and support required to help the .Net plan gain traction as it faces competition to bring software applications to individuals and companies directly over the Web.
"The time is right for us to focus on delivering the level of consulting and support required by that marketplace," said McDowell in a statement.
Microsoft has pitted itself against AOL Time Warner to attract and capture Web users by offering as many services and products in one place as possible.
Microsoft said that nearly one-third of its employees now focus on services.