Here’s the full text of the memo cited by Smarthouse, which confirms what Robert Scoble says in a comment here on Vista Office that, the reorg is correct, but the 60 percent rewrite is not.

The actual claim by David Richards is that a Microsoft insider leaked the rewrite. Here’s the memo:

“Aligning PSD for Growth and Agility.”

From: Kevin Johnson
Sent: Thursday, March 23, 2006 10:01 AM
To: Platforms & Services Division
Cc: Executive Staff
Subject: Aligning PSD for Growth and Agility

Since taking on my new role last September, I’ve spent quite a bit of time focused on how best to position the Platforms and Services Division (PSD) for the future. I want to share with you some of that thinking and some new changes we are undertaking today.

We continue to see a strong wave of innovation from Microsoft making its way to market. PSD is a big part of this wave. The recent launches from our Server and Tools business, including SQL Server 2005, Visual Studio 2005, BizTalk 2006 and Windows Server R2, have been well received by customers and partners, and the team is now focused on Longhorn Server. The Windows client team continues to drive forward on Windows Vista with the latest CTP that was released in February. The MSN division continues to deliver new innovation such as Live Mail, Live Messenger, our constantly improving search offerings and many other Windows Live offerings. MSN itself has enabled new channels and content and continues to expand. All of these product and service releases are evidence of a strong wave of innovation and momentum in the market.

Over the last few months, I’ve made it a priority to listen to what’s on people’s minds. I have had the opportunity to conduct more than one hundred 1:1’s and have met with over 2,000 of you at all-hands meetings and roundtables. Not surprisingly some common themes have emerged. Your questions, concerns and feedback, taken together with the dialogue within our leadership team pointed to the need to address three key questions for our division:

What are the next steps for advancing our vision of software + services?

Are there growth opportunities upon which we should be more focused? How can we be more agile?

As our current product pipeline hits the market, it’s a good time to lay the foundation for the future of PSD. I have been working with Jim Allchin and other PSD leaders to establish an organization that positions us for the future. This has been a very collaborative process and we have considered many options. The PSD organization changes we are announcing today are driven by the following objectives which are rooted in the input I’ve received from so many of you:

1. Software + Services: Position for the next wave of innovation relative to our vision for Windows Live. Ray Ozzie and I continue to work closely to advance the Live vision announced last November. End-to-end scenarios that enable seamless experiences across client, server, and services are critical for all customers, and Windows Vista + Windows Live begins to address this vision. Utilizing services as a distribution vehicle for user experiences enables us to embrace the concept of software + service and deliver innovation to market faster. Doing this requires us to think about the Windows Live platform as a key to the value proposition we deliver to developers. These changes provide clear connections with Ray and his team to help shape the Live platform, Live experiences and the marketing that supports Windows Live.

2. Growth: Focus on the key growth opportunities ahead of us, specifically online advertising, emerging markets, and enterprise computing infrastructure. Our Server & Tools business has shown strong growth over the last few years, and has great opportunities to continue that momentum. Windows Client has growth opportunities in premium offerings, new solutions for emerging markets, and in reducing unlicensed PCs. Certainly the upcoming launch of Windows Vista will spark a new wave of growth across our broader industry and partner ecosystem. Analysts predict the online advertising industry will grow to $35B+ by 2008 which creates opportunity for our MSN and Windows Live businesses.

3. Agility: Lay the foundation for accelerating our pace of innovation, including focusing on ways to improve clarity of decision making, drive greater accountability, and reduce layers in the organization so we can move faster. It also means utilizing existing expertise within the division to embrace services — and rapid release cycles that services can enable — to all aspects of our business. Our software + service approach and the expertise we have built in MSN can support innovation agility as we enable the Live era.

As part of the next step of Jim’s transition, we discussed when it was appropriate to move his direct reports to me, and decided that this organization change was the right time. Jim’s overall partnership role with me in running PSD will not be changing.

The PSD leadership team I’ve put in place to align against these key objectives includes:

Steven Sinofsky, SVP Engineering, Windows and Windows Live Group
Brian Valentine, SVP COSD
Blake Irving, CVP, Windows Live Platform Group
David Cole, SVP, Online Business Group
Yusuf Mehdi, SVP, Chief Advertising Strategist
Mike Sievert, CVP Windows Client Marketing
Will Poole, SVP Market Expansion Group
Bob Muglia, SVP Server and Tools Business Group
Sanjay Parthasarathy, CVP Developer and Platform Evangelism
Brent Callinicos, CFO and CVP Finance Group
Rick Thompson, CVP supporting a special assignment
Darryn Dieken, Technical Assistant
Brian “Skip” Schipper, GM Human Resources
Mary Snapp, CVP and Deputy General Counsel, Legal and Corporate Affairs

I know change is never easy but I truly appreciate the focus that people throughout PSD have on innovation and the wave of products and services our team is delivering to the marketplace is impressive. These changes are intended to help us increase our agility, embrace the concept of software + services, and position us for an exciting future together.

Let’s continue to impress customers and partners with our innovation, and drive satisfaction to levels we’ve never achieved before. Let’s also stay focused on our priorities as we make this transition and align our organization for the future.

For those of you who will be on campus in Redmond on Friday, March 24, I hope you can join me in person, in B33/McKinley Room, from 10:00 – 11:00am. The meeting will start promptly at 10:00 a.m., so please plan on arriving a few minutes early to ensure you get a seat.

I hope everyone else will watch the webcast, which will be streamed live on the intranet and archived there for later viewing. Whether you attend in person or via the Net, you can submit your questions to execqa@microsoft.com before the meeting begins. Thank you for your contribution and your continued focus on innovation and our customers.

Kevin

So we’re back to a nod and a wink from a whistleblower. Personally, I believe Scoble’s rebuttal, but it would be nice to have a definite statement from Jim Allchin or someone other than the PR department.

Despite Robert Scoble’s rebuttal, the 60 percent story peddled by Smarthouse, is still running strongly.

Now the Inquirer is weighing in with its own brand of attack against “the Vole”:

“Smarthouse has dug up an internal memo on the changes from Co-President, Platforms Products & Services Division Kevin Johnson to his executive staff. He said that he had made a lot of the changes after talking to staff. One of the people who seems to have had his job changed is Johnson’s other Co-President, Platforms Products & Services Division Jim Allchin. Although his role in Vole has not changed, apparently he will have to report to Johnson from now on.”

So far, everything hinges on this claim that a memo exists by David Richards of Smarthouse. Scoble is suggesting that the Redmond legal eagles are on the case, with an air of resignation.

But there’s still no strong rebuttal from Microsoft.

What’s not being said here?

The rewrite of 60 percent of Windows Vista is “100 percent false”, says Robert Scoble. Well, I’m prepared to believe that. As Dave Winer says it would be a calamity for Microsoft and its partners.

Scoble says: “I just talked with Frank Shaw, vice president at Waggener Edstrom (Microsoft’s main PR company), he says this article is absolutely not true. Frank knows more people inside Microsoft than anyone else I know (he hangs out with all the execs). There aren’t any Xbox developers moving to Windows, he tells me (verified from other people I know inside Microsoft too).”

He also says: “Can the journalist and editor who wrote this do some homework please?”

I think that’s a little mild, Robert. Time to send in Crocodile Dundee.

Dave Winer casts doubt on Dave Richards’s story that Windows Vista is to have 60 percent of its code rewritten:

“According to David Richards, an unbelievable 60 percent of the Windows Vista code is going to be rewritten before it ships. It’s unbelievable because if it’s true, there’s no way it’s shipping in 2007. If true it’s not just a setback, it’s a multi-billion-dollar debacle on the scale of Apple’s Copland (which, if you recall, resulted in regime change). Basically until someone from Microsoft confirms this, I’d give it zero credence.”

He’s right about the timescale, but is he right to doubt the credence of the story? This is running all over the blogosphere and nobody from Redmond is rebutting it. Robert Scoble hasn’t blogged anything for 48 hours.

What’s going on?