Microsoft planning management shakeup -

Microsoft is planning a management shake-up that will concentrate on replacing many of its executives with fresh people who have an engineering background.

The changes are being sought by Microsoft CEO Steve Ballmer, according to two unnamed sources close to Bloomberg Businessweek.

Ballmer has already been replacing people in the company, last month getting rid of its server division president, Bob Muglia, who had been with the company for 23 years. Ballmer said that the company needed new leadership in this area to focus on cloud computing, an area which is expected to boom over the next few years.

The changes in other key positions are likely to be in the smartphone and tablet sectors, areas which Microsoft arrived considerably late at after the success of Apple's iPhone and iPad and Google's Android platform. The appointments are expected to be made this month, although these plans were not intended to be public.

One of the reasons cited by the sources for the shake-up is mounting investor criticism, which has been focused on Microsoft slipping behind main rivals, particularly with Windows Phone 7, which received good critical reception but had a very late market entry. The dramatic failure of the Kin phone also received stern criticism from shareholders.

The focus on finding engineering people to fill the key positions suggests that Ballmer has lost faith in his marketing team. He already replaced Stephen Elop with Kurt DelBene, an engineering chief, instead of a marketing executive, which was widely expected.

The fact that an engineering background is a prerequisite for the positions suggests that Microsoft's current management lacks this kind of knowledge to a degree, which rivals like Google and Apple have been using to push product lines. 

How about Steve himself? He'll probably be clinging on.