The new financial-reporting structure, which organizes Microsoft’s lines of businesses into three units, reflects the goals that the company’s chief executive has articulated.
Microsoft Chief Executive Satya Nadella’s stamp on the business now extends to the way the company reports its financial performance.
The Redmond company on Monday said it would change — for the second time in three years — how it tallies profit and loss for investors, minting a trio of new groups that align with goals articulated by Nadella.
The new structure organizes Microsoft’s lines of business, from Windows to smartphones and server software, into units centered on productivity and business software, cloud computing and server tools and personal computing.
Those groupings match the missions Nadella outlined in a June letter sent to employees that identified Microsoft’s priorities.
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Analysts say the chief executive, appointed in February 2014, has worked to narrow Microsoft’s work toward business software and its other core products and away from the expansion that saw Microsoft challenge rivals in a wide range of businesses in the 2000s.
By product, the new reporting groups will be:
• Productivity and Business Processes: sales of Office and Web-based Office 365, as well as business planning and customer- relationship management suite Dynamics.
• Intelligent Cloud: Windows server, database-management tool SQL Server, information technology-management tool System Center, Azure cloud-computing platform and Enterprise Services.
• More Personal Computing: Windows operating system, devices like Surface tablets and smartphones, Xbox gaming console and Web search.
The new reporting structure will get its first test with investors and financial analysts when Microsoft reports earnings for its fiscal first quarter on Oct. 22.
Brent Thill, a software analyst with UBS in San Francisco, said the new reporting structure lines up with the way investors already thought about the business. That is, in separate buckets for business software, information-technology infrastructure, and the consumer-focused lines of business.
“I don’t think they’re trying to pull the wool over anyone’s eyes,” Thill said. “In some ways, I think this creates more clarity around the model.”
The new names don’t change how the company actually operates but indicate how a company that sells dozens of distinct products is establishing priorities to its work.
In 2013, when Microsoft was pitching itself as a “devices and services” company under then-CEO Steve Ballmer, Microsoft eliminated longtime reporting silos based on Office, Windows, server products and online services. The newer groupings that were superseded by Monday’s changes were Devices and Consumer Hardware, Licensing and Other; Commercial Licensing and Other.