Kenedict Innovation Analytics

Microsoft’s Reorganisation: A Set of Islands?

Microsoft’s retiring CEO Steve Ballmer recently announced a significant reorganisation¹, transforming the company from its current divisional structure to an organization based on functional areas. The aim is to pursue one single strategy, in which the company’s entire product line is presented as an integrated whole to provide consumers and businesses with a coherent ‘family of devices and services’. Interestingly, Ballmer explicitly mentions that the company’s current divisional structure is set up as a ‘set of islands’, with divisions pursuing their own strategies and overall subpar collaboration between them. Can we also draw this conclusion based on Microsoft’s inventor network?

Written by André Vermeij, Kenedict Innovation Analytics

If Microsoft’s aim is to provide its customers with one holistic, integrated experience across all its devices and services, a starting point would be to make sure the designs of its offerings (both in terms of hardware and user interface) are fully in line. Consumers are already witnessing this transformation – Windows 8 and Windows Phone 8 are based on the same kernel and share key design elements such as the tile-based Start screens (based on Microsoft’s Metro design language) on both operating systems. The latest update of the Xbox 360 user interface is now also Metro-based, while Microsoft.com and Outlook.com also incorporate key elements of this design philosophy.

From an external consumer perspective, Microsoft therefore seems to be heading the right way when it comes to providing an ‘integrated experience’ across all its products and services. The substantial changes to Microsoft’s structure announced as part of the reorganisation, however, show that the company’s internal ways of working are currently not in line with the goal of pursuing one holistic strategy. For instance, how has cross-divisional collaboration developed over the years? An inventor network perspective may help to shed more light on this.

As was done in the previous articles detailing Apple’s inventor network, let’s thus take a look at all Microsoft’s design patents granted and published between 2007 and 2012 to find out in how far inventors in different product divisions actually collaborated on product designs. The analysis is based on a total of 1560 patents produced by 656 inventors. As usual, nodes reflect inventors; the links between them reflect their collaborations on patents. The darker the node’s colour, the better connected it is in the network.

A visualization of the largest cluster in Microsoft's design inventor network

A visualization of the largest cluster in Microsoft’s design inventor network

During 2007-2012, Microsoft operated based on five divisions: Windows, Server & Tools, Online Services, Business and Entertainment & Devices. The above immediately shows a clear split between the left and right parts of the network. Might these also be different divisions?

A closer look at the key inventors present in each of these two main clusters shows something very interesting indeed: the left cluster is made up of many inventors active in the Entertainment & Services division, with the best connected individuals being the Creative Director Xbox (Carl Ledbetter) and former Industrial Design Manager Xbox John Ikeda. In contrast, the right part of the network shows a wide variety of highly connected inventors active in User Interface Design, including Kieran Phelan (developer of Windows 8’s icon system), Greg Melander (worked on Windows’ visual design) and many other (senior) UX designers active in the company’s Windows and Business Divisions.

As can be seen from the visualization, a very limited number of inventors act as bridges between the left and right clusters. Over the 6 years analyzed, only 4 (!) patent collaborations between inventors in both clusters made sure that the network stayed connected. Without these collaborations, the two clusters would have been separate ‘islands’ indeed!

The inventor network perspective showcased here therefore provides initial support for Microsoft’s decision to reorganise: it indeed seems the case that cross-divisional collaboration has been sub-optimal over the past few years, inhibiting the company’s ability to truly align and integrate its products and services.

In a further step towards becoming a full-fledged Devices & Services company, Microsoft recently acquired Nokia’s devices & services division to strengthen its presence in the mobile market and gain a license to a wide variety of patents. The next article will take a deep-dive into Nokia’s patent portfolio and its underlying collaborative networks to determine where its strengths lie. Stay tuned!

¹: http://www.microsoft.com/en-us/news/Press/2013/Jul13/07-11OneMicrosoft.aspx

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