Microsoft to Undergo Reorganization to Spur Sales of Cloud Subscriptions

Published By : 05 Jul 2017 | Published By : QYRESEARCH

An internal memo sent to employees by Microsoft on Monday morning indicates that the company is reorganizing its entire sales organization to pay higher attention to its rapidly-growing cloud computing business. The reorganization will result in the shuffling of existing teams and formation of new ones. Most people are speculating that this change will result in layoffs; however, there has been no formal announcement of layoffs yet. According to a Microsoft’s spokesperson, the company is introducing changes to better serve its customers and partners.

Microsoft to Shift Focus Towards Subscription-based Cloud Services

Microsoft is increasingly trying to shift focus from software licenses towards selling cloud services. With the reorganization, the company is boosting its efforts to sell subscription-based cloud services, a briskly growing US$15.2 billion run rate business. While its conventional, buy-once software business is still sizeable, the growth of the cloud business has been reflecting negatively on its sales. The technology giant is streamlining its sales organization to focus on two major categories of customers. The first category constitutes of large enterprises. The second group is comprised of small, medium, and corporate customers, which Microsoft usually refers to as "SMC."

Sales Team to Focus on Industries Rather than Products

One of the important points of the reorganization is to cut down the costs involved in selling cloud services. With the changes, the sales team will focus on selling services and software of Microsoft to six industries - manufacturing, government, education, health, retail, and financial services. The memo states that the tech organization believes that by paying special attention to its sales efforts on industries instead of products, it will be able to sell an improved package of cloud services that are tailor-made according to customer needs.

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