An Experiences and Devices division, led by Rajesh Jha, will concentrate on Microsoft's products, with Panos Panay put in charge of all hardware. Panay's role makes sense, since he has already had broad involvement with products like Xbox, HoloLens and Surface. Windows, meanwhile, will continue to be led by Joe Belfiore, but with the added responsibility of products like Edge.

Other parts of the team will be moved over to a Cloud and AI team, which will be led by current Azure chief Scott Guthrie. Unsurprisingly, that group will be responsible for building servers and artificial intelligence products for Microsoft's clients. It may also be a sign that MS is taking Amazon Web Services, which offers a competing product, very seriously.

Mary-Jo Foley at ZDNet believes that the motives behind the reorganization are to do what Nadella has done to Office to the rest of Microsoft. Turning Office, a staid software package for desktops, into a subscription service, has become something of a runaway success. By adopting a similar approach to Windows, Servers, AI and Hardware, Nadella is hoping to build an even bigger business on subscription revenue.

Nadella's email makes it clear that Myerson's departure isn't acrimonious, and that the 21-year company veteran will stick around to advise on the transition. It doesn't appear that the reorganization will do much to the company's Xbox division, led by Phil Spencer, which was already pretty distant from Microsoft's core structure.