Dive Brief:

• Microsoft is undergoing a major reorganization, shaking up the Windows group as the company prioritizes the injection of artificial intelligence into its products. The company is creating two new teams: one focused on "Experience & Devices" with another focused on "Cloud + AI," said CEO Satya Nadella in an email to employees published by Microsoft.

• Current cloud chief Scott Guthrie will lead the new cloud and AI team, which includes Azure, business AI, business application development, AI perception and reality technologies and cognitive services.  

• Rajesh Jha is set to lead the experience and devices teams, which will focus on creating a cohesive end-user experience, no matter what devices users are on. Windows, Office, third-party applications and devices will all fall under the team's purview.

Dive Insight:

Part of the reshuffle includes the departure of long-time Microsoft executive Terry Myerson, who leads the current Windows and Devices group. Myerson has spent the last 21 years at the company and has helped spearhead the Windows 10 release and also worked on Xbox One and Surface devices.

He will transition out of Microsoft in the coming months, according to Nadella.

Myerson's departure also signals a shift in long-term plans. Though it has for years relied on prevalence of Windows OS, computing is changing. The company is also less focused on consumers as the enterprise has become a priority. New devices are emerging and a software-centric technology environment lessens the need for desktop applications.

Certainly Windows will continue to be a large part of Microsoft’s product portfolio, but the company is already pushing resources to the cloud, relying on Azure and the injection of intelligence into applications.

Microsoft has soared on its cloud portfolio and growing dominance in the SaaS market. It received CIO's Dive Award for Company of the Year in 2017. The reality is enterprise customers rarely can live without at least one Microsoft product.

Microsoft will continue to have its third engineering team dedicated to AI research, which will boost capabilities across product teams. Nadella is signaling his commitment to everything AI, restructuring the company to better reflect how enterprises are buying services.

The new teams also align with the technologies Nadella sees as the future: mixed reality, AI and quantum computing.

Microsoft is making the necessary shifts to stay relevant long-term, something the company has been savvy at since Nadella took the reigns.