Microsoft is entering a new era

November 13, 2012: 3:52 PM ET

As Microsoft's business changes, the company needs its groups to work cooperatively. The polarizing working style of former Windows head Steven Sinofsky may not have fit that mandate.

steven-sinofsky

Outgoing Microsoft Windows chief Steven Sinofsky.

FORTUNE -- The departure of Windows chief Steven Sinofsky came as a shock both inside and outside of Microsoft. Up until this week, many believed the long-time, powerful exec was next in line for current CEO Steve Ballmer's job. But regardless of Sinofsky's reasons for leaving (or being asked to leave), and the short-term turmoil it will likely cause, it may turn out to be a positive step for Microsoft as the company heads into a new, Windows 8-driven era.

Ironically, Sinfosky was the driving force behind Windows 8, the company's attempt to reclaim lost relevance in the personal computing world. Unlike previous versions of Microsoft's (MSFT) operating system, Windows 8 encompasses PCs, tablets and phones. It required the various divisions of the Redmond-based tech giant to work together. (The company is notorious for the opposite -- if you haven't seen it before, check out the satirical take on its organizational chart here.) But Sinfosky was a polarizing figure at Microsoft. He had an impressive track record for delivering software on time but was known for his combative style. For Windows 8 -- the future of Microsoft -- to succeed, the company's various factions need to continue to collaborate, not compete.

Current CEO Ballmer alluded to this need in a release issued by the company on Monday, saying he is "grateful for the many years of work that Steven has contributed to the company," but adding that it is now "imperative that we continue to drive alignment across all Microsoft teams, and have more integrated and rapid development cycles for our offerings."

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Sinofsky seemed the most logical future successor to Ballmer. After all, he knew the business inside and out and had developed a loyal group of followers at the company. But if Microsoft's future is all about driving alignment within the company and faster software updates, the former Windows head didn't have the necessary profile. His departure presents an opportunity for Microsoft to cultivate leaders that can work together to build great products--and convey a more unified message to outsiders. "Sinofsky's command-and-control approach has yielded confusion (among partners, media, analysts, and customers) exactly at the moment where Microsoft needs clarity," writes Forrester Research analyst Sarah Rotman Epps (from her Microsoft Surface tablet).

Microsoft stands at a crossroads. According to a recent report from IHS iSuppli, the company's share of the operating system market for PCs, tablets and phones is expected to slip to 33% in 2016, down from 44% in 2011. Up to now, it has largely missed out on mobile. The "new era" at Microsoft is all marrying smartphones and tablets with traditional computing, all under the umbrella of Windows 8. And it doesn't just mean a more mobility-centric hardware and software focus, or bridging the gaps between its notoriously competitive divisions so that all Microsoft products benefit from the same technology.

It also means a whole new approach to delivering software. Sinofsky may have had an impressive record for delivering software on time, but he was on a multi-year schedule--a boxed software kind of guy. Microsoft needs to change that: Today's mobile users expect constant updates not just on their smartphones but also on their PCs.

MORE: Microsoft tries again with Windows Phone 8

For Microsoft to succeed, it needs to be more mobile, more agile and more integrated. (Something much more akin to the analysis of Apple by my colleague Adam Lashinsky.) But it also needs to capitalize on its strengths, particularly its large developer community and its enterprise roots. The new, Sinfosky-less Microsoft is late to tablets, but it's got a big opportunity to carve out a niche in the enterprise, regardless of the iPad's current hold on the market. "IT managers and administrators have been comfortable with Microsoft products for quite some time, and they are anxiously awaiting the next step of complete and seamless integration with the range of Microsoft products, including SharePoint, MS Office, Skype, Lync and Yammer," notes John Marshall, CEO of mobile device management provider AirWatch.

Of course, while Sinofsky may not be the right candidate to run the "new" Microsoft, it's not clear whether current CEO Ballmer is either. Many of the company's fumbles in mobile and other consumer products have happened under Ballmer's watch. "I do think Microsoft needs someone who can unite, inspire and lead them into battle against Apple (AAPL), Google (GOOG) and all the other challengers they face," says Sriram Krishnan, a former Microsoft program manager. "A lot of Microsofties assumed that was going to be Sinofsky."

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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