Whoa! Nadella cleans house at Microsoft

Opening Day Of Mobile World Congress 2015
Stephen Elop, executive vice president of devices and studio for Microsoft Corp., speaks as he unveils the new Windows Lumia 640 smartphone in the Microsoft Corp. pavilion at the Mobile World Congress in Barcelona, Spain, on Monday, March 2, 2015. The event, which generates several hundred million euros in revenue for the city of Barcelona each year, also means the world for a week turns its attention back to Europe for the latest in technology, despite a lagging ecosystem. Photographer: Pau Barrena/Bloomberg via Getty Images
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As Microsoft kicks off its fiscal year, CEO Satya Nadella is making big changes.

Once-and-again executive Stephen Elop who left Microsoft to head Nokia then rejoined the software giant via its purchase of Nokia’s mobile handset business, is gone. Ditto Kirill Tatarinov, who had headed Microsoft (MSFT) Dynamics business applications push. Long-time veteran Eric Rudder is also gone.

The Dynamics applications, including customer relationship management and financial accounting applications now belong under Scott Guthries’ cloud and services group.

Elop was seen as a possible CEO candidate during Microsoft’s prolonged—and somewhat painful—CEO search. As one former Microsoft executive put it: “Who needs a wannabe CEO lurking around?” Presumably not Nadella.

A Microsoft source said these changes reflect the influence of Kurt DelBene, the former president of the Microsoft Office division who left two years ago to work for the Obama Administration. but rejoined Microsoft in April as executive vice president of corporate strategy and planning. All of this smacks of a strategic shift to put more of the company’s resources behind cloud services where it faces a big challenge from Amazon(AMZN) Web Services, Google(GOOG) and other companies.

Here’s the gist of the shakeup: Executive vice president Terry Myerson will lead a new Windows and Devices Group, including operating systems as well as devices—once Elop’s purview.

Scott Guthrie, as mentioned, keeps the Cloud and Enterprise group but adds the Dynamics business apps to his roster. Executive vice president Qi Lu retains applications and services with additional responsibilities around education software.

The official details are in this internal email to staff.

And, as reported, chief insights officer Mark Penn, is also out the door.

This story will be updated.

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