In a move aimed at creating "greater agility," Microsoft has reorganized its business into three divisions.

Microsoft CEO Steve Ballmer today announced the reorganization, which will split the company into the Microsoft Platform Products & Services Division, Microsoft Business Division and Microsoft Entertainment and Devices Division. Ballmer will appoint a president to each division.

Microsoft Platform Products & Services Division includes the Windows Client, Server and Tools, as well as MSN business units.

"The platform groups have great expertise in creating a software platform and user experience that touches millions of people," Ballmer said in a statement. "By combining these areas of expertise, we will deliver greater value to our customers."

"These changes are designed to align our business groups in a way that will enhance decision-making and speed of execution, as well as help us continue to deliver the types of products and services our customers want most," said Ballmer.

The Platform Products and Services Division will actually have two presidents initially -- Kevin Johnson and Jim Allchin.

Allchin will retire in 2006 after the launch of Windows Vista. Eric Rudder, currently the senior vice president of Server and Tools, will be changing positions after Visual Studio and SQL Server 2005 are launched later this year.

Rudder in his new role will be working directly with Bill Gates on strategy and development efforts.

The Microsoft Business Division is a combination of Microsoft Business Solutions (MBS) and Information Worker units. It will be lead by Jeff Raikes who was previously the group vice president of the Information Worker Business.

The Microsoft Entertainment & Devices Division is combination of the existing Home and Entertainment unit with the Mobile and Embedded Devices Division. Robbie Bach, formerly the senior vice president for Home and Entertainment and chief Xbox officer will be the president of the Microsoft Entertainment & Devices Division.

Ray Ozzie, formerly of Groove Networks and now Microsoft CTO, is expected to expand his role within the company, "by assuming responsibility for helping drive its software-based services strategy and execution across all three divisions."