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Cloud sales shift as enormo Microsoft reorg continues – sources

Enterprise, corporate sales become one

By Andrew Silver, 3 Jul 2017

Microsoft is in the process of squishing more of its various sprawling limbs and partners into a single group. Multiple sources close to the tech giant have told us jobs would be cut during the upcoming revamp, although they could not name a number.

Our sources are expecting a shift in the org chart of the tech behemoth, which they said will be announced in the coming week.

The change – one of a number of current and upcoming changes to be effected across the globe – is meant to "streamline" Microsoft's offerings and make services more efficient, particularly cloud products, sources say.

A section of the new group will manage customers and other partners. According to The Register's sources, the consolidation requires reorganising sales staff around the world.

Previously, sales staff in the enterprise group did not have in-depth knowledge about the consumption based programmes. Now, people in the new group will be aware of it – which is better for Microsoft's cloud strategy.

Another shift, instituted on 1 July, means Microsoft's customers previously needed over 250 users in order to sign on to Enterprise Agreements – where they commit to specific consumption and get a discount. The barrier for entry to an EA is now 500 users.

Although the discounts for an EA would be higher than for a month-to-month pricing scheme based on consumption, going with a consumption-based model might work out better for customers with workloads that are more dynamic than static, according to one source.

It's of course also good for Microsoft, a source says, because consumption-based models mean a more continuous income throughout the year.

Redmond originally announced the consolidation on January 5.

However, at the time, a spokesperson for the tech giant told ZDNet: "There are no layoffs as a part of today's announcement. Like all companies, Microsoft reviews its resources and investments on an ongoing basis."

Microsoft's fiscal year ended June 30, so the reorg coming into effect at the start of the new fiscal year (July 1) is not terribly surprising.

One source says that before the change, Microsoft was a "monster" with "too many cooks" – too many decision-makers across different verticals.

The reorg has come down in every region where Microsoft operates, across all products and services.

One of our sources estimates that 85 to 90 per cent of the in-out for employees has already taken place.

Another source says the change has been very expensive for Microsoft because labour laws differ from country to country.

And it might not all be bad news for employees – one source says a benefit could be better career mobility. Previously it was difficult to jump the ranks between groups.

A Microsoft spokesperson said: "We do not comment on rumours or speculation."

If you've been affected by the change, we want to hear from you. Shoot us an email here. ®

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