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Microsoft’s reorganization into three major business units will have only a slight impact on its developer-focused division, company officials and analysts say.

The change which will have primary impact will be that Eric Rudder, Microsoft Corp.’s senior vice president of Server and Tools, will be taking on a new role. Rudder will be working directly for Bill Gates, the software giant’s chairman and chief software architect.

Company officials said Rudder will focus on some of Microsoft’s leading advanced development efforts as well as the company’s overall technical strategy.

Rudder will move into his new role following the launch of Visual Studio 2005 and SQL Server 2005 in November, the company said.

In an e-mail to Microsoft employees describing the reorganization, Microsoft CEO Steve Ballmer wrote: “We’re also announcing that Eric Rudder will be taking on a new role working directly for Bill, focusing on some of the company’s key advanced development efforts as well as overall technical strategy.

“Eric has done a great job of driving broad usage of .Net with developers and has led incredible growth and success of the server and tools business.”

Read more here about Ballmer’s e-mail to employees detailing Microsoft’s reorganization.

Microsoft officials said that under the reorganization the new Microsoft Platform Products & Services Division will be led by Kevin Johnson and Jim Allchin as co-presidents; Jeff Raikes will be president of the Microsoft Business Division; and Robbie Bach has been named as president of Microsoft Entertainment & Devices Division.

Ray Ozzie will expand his role as chief technical officer by assuming responsibility for helping drive the company’s software-based services strategy and execution across all three divisions, Microsoft said.

To read more about Microsoft CTO Ray Ozzie’s expanded role, click here.

Rudder has been championed as the heir apparent to Gates by some observers, particularly in terms of his technology vision, should Gates ever step down.

“I don’t think dev [the developer division] changes much if Rudder’s Server and Tools division is still intact within Kevin’s organization,” said Michael Goulde, an analyst with Forrester Inc. who spent a few years as a strategist at Microsoft. “And Windows client and server are now more tied together than ever.”

Meanwhile, Joe Wilcox, a Washington-based analyst with Jupiter Research of Jupitermedia Corp., said he thinks the reorganization positions Microsoft to launch a much bigger strategy based on its MSN brand.

“This means MSN gets a bigger role,” Wilcox said. “It looks like Microsoft is taking Google, and all those guys talking about Web 2.0 very seriously. I see MSN emerging as another development platform with a significant emphasis on services. And by aligning it with Windows, there will be services aligned with the core asset and protecting it.”

Moreover, Wilcox said he views MSN as the platform for evangelizing and promoting technologies like Atlas, Microsoft’s tool for AJAX (Asynchronous JavaScript and XML) development; WPF (Windows Presentation Foundation, formerly known as “Avalon”); and Microsoft’s XAML (Extensible Application Markup Language).

Meanwhile, Microsoft also announced that Jim Allchin, former group vice president of platforms and newly announced co-president of the new Microsoft Platform Products & Services Division, will retire at the end of calendar year 2006.

Allchin has been Microsoft’s leading guru, defender and promoter of the Windows platform for years.

“This is a personal decision that Jim has spent a great deal of time thinking about and that I know was a difficult one for him to make,” Ballmer said in his e-mail. “Jim and Kevin Johnson, who will succeed Jim, will serve as co-presidents until Jim’s retirement next year.

“I know I speak for the entire Microsoft family when I say how proud we are of Jim’s accomplishments here. Jim has had an immeasurable impact on our success. Millions of customers are able to realize their potential everyday thanks to software on which Jim was a key visionary and design architect. Of course, we’ll celebrate Jim’s great contributions closer to when he actually retires.”

Goulde said he will wait and see what the reorganization produces.

“The reorganization will do little or nothing by itself to accelerate decisions or speed time to market of products,” he said. “How many layers of management are they taking out and what are they doing to empower program and product managers and reduce the number of reviews a plan has to go through before it gets a green light?

“On the other hand, Allchin’s retirement could have a profound affect on Microsoft’s future, as he is the strongest proponent of the ‘Defend the Windows brand at all costs’ strategy. With Allchin gone, Hell could get flash-frozen.”

Click here to read more analysts’ reactions to Microsoft’s reorganization.

In fact, in an interview with Allchin at last week’s Microsoft PDC (Professional Developers Conference) in Los Angeles, eWEEK asked him which is more important to the company’s overall strategy: fostering Microsoft’s relationship with developers who build on the Microsoft platform, or protecting the Windows franchise. Allchin said the two go hand-in hand.

“Well, developers do want to touch a lot of customers,” he said. “We have to make our platform very popular in order for them to do that. If we make their jobs easier then they’ll be more likely to stay on the Windows platform. At the same time, we have to listen to them and forget about competitors in terms of the platform.

“There’s a bunch of old installed base systems that those customers often want to run on. So we spend so much time on app compatibility and reach… we’re trying to make their job easier, and I think that’s a winning strategy for them and also for Windows. If they can have their application show up on a Smart Phone using Microsoft technology, and also show up on a Tablet and the Media Center and the regular desktop and make it simple for them, that’s good for us.”

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