Zune Team Disbanded

[Palmer Deville]

Microsoft splits Zune team in two @ CNet.

Take Microsoft's spin however you want - the Zune team was more than split in two. It was in fact disbanded. The Zune software employees now work for Enrique Rodriguez who runs Microsoft's Mediaroom and Media Center TV. The Zune hardware employees now work for Tom Gibbons, who runs hardware for Microsoft's Windows Mobile unit.

There is no longer a Zune team.

As I see it, new hardware was already in the works and will see market. However, according to Microsoft, "expect products within this calendar year that take the Zune service beyond just Microsoft's own line of digital music players." "Zune the service needs to transcend Zune the device."

They claim they'll continue making the in-house Zune, but I don't see that lasting after other players start bringing PlaysForSure2 devices to market.

[WillysJeepMan]

The Microsoft apologists will simply claim that this is part of a move to broaden the Zune presence beyond just a dedicated mobile device.  And when the Zune brand disappears, it will be that the assimilation is complete. 


"Zune the service needs to transcend Zune the device," Rodriguez said.

That is exec-speak for, "We're sunsetting the Zune but I can't really admit it."

[ronaldmonster]

Eh I doubt that's bad for Zune. They want to expand the Zune service, so it's best instead of laying them off move them to the other departments to make sure that Zune stays intact.

Doubt it's the end of Zune.

[RL]

It could be that the company is hedging bets with this strategy.

If the "last run" of the Zune is this fall, what will Microsoft do if it hits a home run and makes significant marketshare gains?  (Unlikely, but not impossible.)   

Should be an interesting year to watch.

[clubdirthill002]

For heavens sakes, Microsoft does this all the time. Don't worry.

For example, I believe there is no longer a Windows Live team, they are now simply part of Windows. Is Windows Live gone? No. Just because there is not a dedicated team does not mean there is not a product.

Zune as a device has far higher market share than some other devices, and they are still kicking. Please stop suggesting Zune is dying and proclaiming Doom every time Microsoft does something. First off, your negativity is not helping Microsoft feel any better or enthusiastic about. Two, you are killing these communities and making them not fun to go to, if you think Zune is dying start zuneisdyingforum.com or something. We don;t want your grief. And third, Zune is not dying so stop saying it is.

[Trastan]

If, indeed, the Zune does survive this, it would seem to be the right decision. People remark all the time on how Microsoft is much too disjointed, that its various divisions seem to be operating completely independently, and sometimes in opposition, to each other. For all intents and purposes, combining these groups DOES make sense, if they do it right. Heck, throw in the XBox team too; there's a tremendous amount of potential inherent in combining these separate entities into one goal. One video marketplace, one media playing software, one shared interface, etc.

I'm not sure where Microsoft intends on taking Zune, and I certainly don't have blind faith in their success, but, if they do this right, they could have quite the powerful ecosystem.

[JohnCz]

Should be an interesting year to watch.

Totally agree.  Zune as a brand will live on and on and on.  I am totally behind them looking at their entertainment platforms in a more holistic approach not only in content delivery, but also interoperability and accessibility.  There should be one development story for how content providers can deliver content to XBox, Media Center and Zune devices.  And these content "channels" should be unified under one marketplace.  There should be a unified/agreed upon approach on how to remotely access your content on the road.  I'll stop there but I could go on for hours.

[Zuneblack]

wow.. This is going to be a shaky year for Zune then.

[typoink]

They claim they'll continue making the in-house Zune, but I don't see that lasting after other players start bringing PlaysForSure2 devices to market.

Then again, it's entirely possible they won't license any "playsforsure 2" devices and will keep the Zune brand only on Zune-made "dedicated devices" and Windows-based "platform" devices.

Or it's possible they axe the Zune hardware after the next round.

It's premature either way.  WJM is constantly harping on about people not taking any organizational changes as a GOOD sign, but he's awfully quick to take them as a negative.

[Palmer Deville]

Then again, it's entirely possible they won't license any "playsforsure 2" devices and will keep the Zune brand only on Zune-made "dedicated devices" and Windows-based "platform" devices.

"expect products within this calendar year that take the Zune service beyond just Microsoft's own line of digital music players."

Unless there are some misplaced modifiers, they are referring to digital music players other than Microsoft's. But it's not a direct quote, so who knows.

And as far as signs that Microsoft sees the dedicated Zune device losing importance, "You have to have a hero device," [Rodriguez] said. "If you ask me how important is it from a numbers perspective, today it's ultra-important. If I do my job right, part of my job is to make it less important. Part of my job is to make sure the service comes into every device." "Rodriguez said by combining teams, Microsoft has more people focused on entertainment broadly." "Meanwhile, the company says it is not getting out of the Zune hardware business altogether." Each comment is an indication that Zune hardware has been de-emphasized.



Any way you slice it, Microsoft has blurred their focus on Zune. Now that they have several different brands all working toward the same goal, some are going to be folded into the others to avoid consumer confusion (Well, maybe not). At the rate we're seeing Zune torn apart, new announcements about every thirty days, it won't be long before Microsoft says PlayForSure is now Vista Certified, I mean, Zune is now Media Center with Music Pass Ultimate Edition Live!

The Zune hardware employees now work in Microsoft's Windows Mobile hardware unit. From what I understand, this unit builds prototype/reference hardware for software development and 3rd party hardware manufacturers.

The Zune software employees now work in Microsoft's Mediaroom and Media Center TV. Don't fool yourself into thinking some of those people are adding to Zune. I would wager that the Zune team is now supplementing Microsoft's general media effort.

And on top of that, this all goes against Microsoft's partnership with Netflix. What is Microsoft now, a Netflix affiliate?


EDIT: Just to be clear, I'm not saying that Microsoft won't continue with their music and media initiatives. I'm simply saying that the Zune brand, as we know it, will be almost unrecognizable by the end of 2010. Whether Microsoft's music platform will ever be considered a success, from a business standpoint, is debatable. Multiple efforts have failed.

[Zunerama Ed.]

Thanks for posting this. I wouldn't exactly call it 'disbanding', but I do agree this is significant news, and signals even more of a shift in focus to software/services over hardware.

The fact that the Zune team does not exist as a separate entity is concerning to me. They're not doing this with Xbox, and this does not seem a strategic measure for Zune so much as a cost-cutting measure.

The official reason, from Enrique Rodriguez of Microsoft's Media Room and Media Center TV group, is that the reorganization was about "bringing more heads together to work on a unified entertainment approach... a more cloud-based approach."

I work for a major (Fortune 100) corporation, and when cost-cutting is required, an easy way to do that is to merge divisions. Collapsing 20 organizational units into 15 can cut a lot of overhead costs.

I'm sure that Microsoft's hand is being forced by economic realities - and that in a different fiscal environment they would not be doing this. Rodriguez's comment is telling: "We're just being very pragmatic and even more so in a world in which not even Microsoft can afford to over-invest."

It also seems apparent that Microsoft feels it has more to gain from Zune software and Zune Marketplace than it does from Zune hardware. As Zune software and services extend into other 3rd-party devices, the software grows in importance and the Zune player ceases to be the centerpoint of the Zune strategy.

There's one variable that could change this: how well the next Zune player is received. I mentioned before the excitement that I'm sensing from the Zune hardware team about this. And the new player line will almost certainly come out this fall. That might not change the emphasis on Zune software, but it could ensure a continued focus on Zune players in the years to come.

As Rodriguez notes, "The reality is, [the Zune player] will continue to be the one vertical device that we control every...aspect of it all the way to what it says on the box," he said. "So shame on us if it is not the best."

[Palmer Deville]

Thanks for posting this. I wouldn't exactly call it 'disbanding', but I do agree this is significant news, and signals even more of a shift in focus to software/services over hardware.

Put simply, the success of Zune is no longer directly under one executive as it was before. There is no longer a "Zune" to be measured based on its successes or failures*. The whole was not greater than its parts - they have therefore been broken into individual units, disbanded.

*It's likely Zune will not be reported on marketshare nor will it be specifically reported in Microsoft earnings statements.

[Pete]

You know I am fairly new here but the reason is that I came here because this site seemed to shield itself somewhat from these doomsday scenarios now it runs again with rumors and speculation.  To me the glass is half full not half empty.

[Zunerama Ed.]

Take heart, Pete. Zune's death has been predicted prematurely many times over the past two years! While this news is concerning to me, I think it's a reality of how it is still an 'investment' for Microsoft and not a margin-generator. But I'm excited to see the software updates and the hardware line releases coming up this year.

[typoink]

"expect products within this calendar year that take the Zune service beyond just Microsoft's own line of digital music players."

Unless there are some misplaced modifiers, they are referring to digital music players other than Microsoft's. But it's not a direct quote, so who knows.

Not necessarily.  The Zune device is "Microsoft's own line of digital music players."  If "Zune" capability shows up ANYWHERE else, that would be taking the Zune service beyond just Microsoft's etc."

Zune for WinMo would satisfy that.  The rumored deal MS is making with either a cellphone maker or provider to offer a Zune player on "standard" cellphones would satisfy that.  A Zune app that integrates with some sort of set top box (360 perhaps?) would satisfy that.  A Zune-integrated version of MS's new in-car technology would satisfy that.

Is it possible we'll see "Zune-compatible" devices from other manufactuers?  Sure.  Is it necessary given the above quote?  Definitely not.

Given Bach's statements that dedicated media devices are on the way out AND that the Zune hardware line will be continuing, I don't think opening up the Zune ecosystem to OTHER dedicated players would necessarily make sense -- I can imagine them doing so if they discontinued their own hardware players, but doing so otherwise would risk cannibalizing their own business.