As the head of Microsoft Corp.’s Windows operation as it loses market share, Terry Myerson already had the hardest job at the company. By putting him in charge of the company’s unprofitable phone business as well, Chief Executive Officer Satya Nadella just made Myerson’s life a lot harder.
Nadella’s biggest reorganization since taking his post last year makes Myerson head of the Windows and Devices Group. Former Nokia Oyj leader Stephen Elop, who had run the phones operation, is leaving.
Myerson, 42, has been overseeing a Windows business that is facing a new reality among customers and at Microsoft. The operating system has lost most of its consumer-computing market share to tablets, phones and Apple Inc.’s Mac PCs. Within Microsoft, Windows is attempting to find a role at a company that is focused on releasing its most popular applications — the Office suite, for example — to work on rival operating systems.
So far, he has worked on winning back corporate customers with a Windows revamp due out next month that restores some of the design elements popular among businesses. He also has added a new Web browser and unveiled ambitious projects like the HoloLens augmented-reality goggles and software. Myerson previously had oversight for phone, Xbox and HoloLens software. Now he gains the hardware as well.
Microsoft declined to make Myerson available for comment.
Big Challenge
With phones, Myerson has to fix a hardware business that was already in decline when Microsoft decided to acquire the unit from Nokia in September 2013. Microsoft in April said it wouldn’t get the business to “operational break-even” next fiscal year, as previously predicted. The company also has cautioned that it might have to take a writedown for impaired assets in the operation.
“Anyone who got the phone business would have a huge challenge, even without the other things he already had to deal with” said Mike Silver, an analyst at Gartner Inc. “You add it all up and it’s certainly a lot.”
Still the change is logical, he said. Windows 10, which goes on sale July 29, looks promising, Silver said. That may have given Nadella the confidence to give Myerson a new challenge, according to the analyst.
Under Myerson, Microsoft has also been experimenting with new business models for Windows, making the operating system free on smaller tablets and phones and offering free upgrades to the coming update.
Management Style
With the personal-computer market slumping, he will have to chart how Microsoft makes money from Windows. He also will have to prove the value of Windows over other operating systems as Microsoft’s Office apps team focuses on product development and acquisitions to offer strong applications for Apple’s iOS and Google Inc.’s Android mobile operating systems.
Myerson, who previously ran the Windows Phone group and the Exchange e-mail server operation, is known for being opinionated and outspoken — qualities that occasionally have caused clashes with others, according to people familiar with Microsoft’s management. With Nadella telling executives that he values collaboration and cooperation, Myerson has worked on his approach and made progress, they said. The new duties are both a vote of confidence and a recognition that his unit was the logical home for the hardware that runs the software Myerson oversees, the people said.
“He is the guy that fixes any major structural problem,” said Daniel Ives, an analyst at FBR Capital Markets. “Fixing the phone hardware business remains a task harder than hitting a half court shot in basketball blindfolded. Myerson is the right guy for the job, although this remains a Herculean task.”
