The first couple of months of each year, Microsoft typically reorgs something. This time around, it’s the Experiences and Devices unit under Executive Vice President Rajesh Jha where a lot of the changes are happening.

The biggest and boldest move in the Feb. 5 reorg being announced internally today involves the Windows Experience (client) and the hardware teams. Microsoft is going to roll up these two businesses into a single team, known as Windows and Devices  — reporting to Chief Product Officer Panos Panay, I’ve confirmed with a person familiar with the changes who asked not to be named. The move takes effect on Feb. 25.

Corporate Vice President Joe Belfiore, who currently heads the Windows Experience business under Jha, is going to move over to the Office side of the house. Belfiore and Ales Holecek will be leading the Office Experience Group (OXO) team as a product/engineering team. Belfiore will continue to lead EPIC (Essential Products Inclusive Community), which includes the mobile apps on Android and iOS and Microsoft News.

Today’s changes do not affect Microsoft’s COSINE (Core OS and Intelligent Edge) team, which will continue to be part of the Azure Engineering organization under Executive Vice President Jason Zander. Nor do they change the strategic priorities of Jha’s Experiences and Devices unit.

For the past few years, Microsoft has been designing Windows, Office, and Surface together, making sure that new Surface products would light-up features in the operating system and Office apps and services. So, in some ways, Panay’s new role is just a formalization of that operating procedure. It’s also likely a way to give Windows a little more visibility internally and externally. (Just to be clear, Panay is not joining the Microsoft Senior Leadership team as part of this; his boss Jha is on the SLT.)

But I’m curious to what extent Microsoft’s OEM partners will be uneasy about Windows client and Surface being a single unit — given that many of these OEMs were none too happy when Microsoft originally got into the PC business itself back in 2012. Microsoft officials continue to say that the decision to be a PC maker was about helping carve out new markets for Windows. But Surface has become a robust business for Microsoft in its own right, currently bringing in roughly $4 billion a year. 

Update: Here’s an excerpt from Panay’s internal email announcing his new role (which I’ve verified is genuine): 

“Personally I’m very excited to lead the Windows Client for Microsoft, which will help us streamline our decision-making processes, be clear on our priorities, and deliver the best end user experiences from silicon through operating systems across all Microsoft apps and service connected devices (OEMs and Surface). We believe this will make the Windows Client experience better for the entire PC ecosystem. Designing hardware and software together will enable us to do a better job on our long term Windows bets (dual screen, silicon diversity, connectivity, app platform, etc.) and having a single point of Windows Client Experience leadership driving consistent priorities and resourcing across all of Windows client will help all of us accelerate innovation and improve execution. This is such an amazing time and opportunity to bring more energy to Windows and our customers using Windows. It won’t be easy, but extending our growth will be key for our company strategy.”

A couple of interesting backstory tidbits about these reorg moves. Late last year, there were rumors that Panay might be on the hunt for a new role, either inside or outside Microsoft. I’d heard from one source of mine that he was considering a leave of absence or might be considering joining Apple. But I couldn’t confirm this to the extent that I felt comfortable reporting it. 

Also, Belfiore is not going to assume his new OXO role until this fall. In mid-March, he and his family will be doing another “Semester at Sea” educational experience, so he will be on leave from Microsoft from then until the end of summer. Eran Megiddo, corporate vice president of Windows Product and Education — who was charged with establishing product direction and strategy for Windows client since May 2019 — is going to be focusing on Modern Life Experiences (MLX) and Education, going forward.

There are a number of additional changes happening in Jha’s organization that are being announced today. Microsoft veteran and Corporate Vice President Brian MacDonald, who currently runs the Microsoft Teams business, is retiring from the industry but will consult part-time with Jha and has a team. Corporate Vice President Jeff Teper is going to lead Teams along with OneDrive and SharePoint in his stead.  And Kirk Koenigsbauer, who currently is corporate vice president of Microsoft 365, is going to become Jha’s chief operating officer.