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Microsoft Executive Vice President Scott Guthrie at the inaugural GeekWire Cloud Tech Summit. (GeekWire Photo / Kevin Lisota)

Microsoft’s cloud business is the company’s economic engine these days, hitting aggressive revenue targets earlier than expected with plenty of room to grow. The group tasked with carrying out that mission just got a little bigger.

As part of a sweeping reorganization in the engineering ranks announced Thursday by CEO Satya Nadella, Scott Guthrie, executive vice president of Azure until today, will now lead a combined Azure and artificial intelligence group called Cloud + AI Platform. Guthrie, a Microsoft lifer, is being given control of some of Microsoft most important bets on cloud and edge computing driven by applied machine-learning techniques.

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Jason Zander is being promoted to executive vice president and will lead the core Azure team, which now also includes all of Windows platform development under Harv Bhela, Henry Sanders and Michael Fortin. While the cloud is Microsoft’s future, it still sells a lot of Windows Server software, and while the consumer versions of Windows will still be finalized in a different group this organization will develop the common plumbing that connects all versions of Windows.

Two new teams focused on artificial intelligence will also live under Guthrie in the new organization: AI Perception & Mixed Reality, led by Alex Kipman, and AI Cognitive Services & Platform, led by Eric Boyd. The first group is developing the core technologies used by Microsoft’s Mixed Reality device group and Azure customers working on augmented reality or virtual reality, while the second focuses on AI-driven cloud services that are made available to Azure customers.

AI research will continue to live in a separate group under Harry Shum, and Microsoft promised there would be a fair amount of coordination between the revamped cloud and AI groups.

The Business Applications Group, which oversaw development of products like Dynamics 365, is being renamed the Business AI group under James Philips and will take on the Customer Service, Marketing, and Sales Insights group. And the Universal Store team, which worked on building commerce systems for all of Microsoft’s consumer and business activities, now lives under Guthrie.

Guthrie was already one of Microsoft’s key engineering leaders, but this reorg arguably makes him the most important engineering executive at Microsoft following the departure of Terry Myerson as part of Thursday’s reorg. A sizable chunk of Microsoft’s future growth plan is predicated on the success of Azure and the landgrab currently underway in AI-driven cloud services in which all cloud vendors are heavily investing in hopes of getting an edge over their rivals.

Here’s a video of Guthrie speaking at our GeekWire Cloud Tech Summit last year:

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