Cloud impact: to reorganise its sales groups, resulting in layoffs

With Microsoft putting emphasis on its Cloud-computing products instead of licences for boxed software, the technology giant is likely to reorganise its sales groups, resulting in layoffs, media reported

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With the technology companies pushing for Cloud computing and selling their products and services on subscription basis, the newer energy and skills are being looked for to run the sales group resulting in re-organisation of sales division. Global technology which has put emphasis on its -computing products instead of licences for boxed software is likely to reorganise its sales groups, resulting in layoffs, said media reports.

A formal announcement could be made by next week, Seattle Times reported, citing a source familiar with the matter. Plans for a Cloud-focused reorganisation were reported earlier by the Puget Sound Business Journal, which said the shift will bring some of the most significant changes to the sales force in years.

Judson Althoff, Executive Vice-President, Worldwide Commercial Business, Microsoft, has been critical of company’s former sales approach, which he characterised as an attempt to sell Azure, Microsoft’s platform of on-demand computing power and software services. The sales group of Microsoft was affected in an earlier announcement. The layoffs announced in July 2016, which targeted 2,850 cuts over the course of Microsoft’s just-ended fiscal year, included at least 900 employees of the sales group.

Microsoft had also added to the payroll about 1,000 salespersons with specialties in selling Cloud-computing products, Althoff had earlier said.

The company’s sales force has been trained for years to sell software for use on desktops and servers. Now it’s more important to convince customers to sign up for cloud services hosted in Microsoft’s datacenters. The Redmond, Washington-based company wants to accelerate this switch to add more revenue and catch cloud market leader Amazon.com Inc, reported Bloomberg.

Friday was the end of Microsoft’s fiscal year, the first in which Althoff and Courtois have run the sales and marketing organisations, taking over from Kevin Turner who left in 2016.

The restructuring is scheduled to be announced as soon as next week and will impact the Worldwide Commercial Business under Judson Althoff and Jean-Philippe Courtois’ global sales and marketing group, report said.

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