4 Things CIOs Need to Know About Microsoft's Reorg

The slow but steady decline of the personal computer has not been kind to the outlook for the software giant, while the emergence of Microsoft Surface as a sort of tablet window into the era of personal devices has not gone as well as the software giant had hoped, surely.

The Windows franchise lives and breathes at this point with PC shipments, and with Barron's reporting that PC shipments fell by 11 percent this quarter as compared with the same period last year, the problem is clear: Microsoft needed to shift, even on the server and enterprise side, one of the billion-dollar, consistently profitable segments of the company.

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Ballmer was nervous and needed to light a fire. The reorganization, according to Ballmer, is intended to help transform the company into an era where PCs are just one piece of a much larger pie.

"The form of delivery shifts to a broader set of devices and services versus packaged software," Ballmer writes in his memo, indicating that he wants Microsoft relevant in more than just PC and Xbox.