Muglia To Depart Microsoft Server and Tools Unit

Ballmer says time is right for change at the top of $15 billion unit. No successor yet named.

January 17, 2011
By

D.H. Kass

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Microsoft Corp. said last week that Bob Muglia, the highly visible, two-year president of its $15 billion server and tools business, will depart the company this summer, according to a memo to employees from chief executive Steve Ballmer.

Muglia, who has been at Microsoft for 23 years, is the fourth top executive to leave in the past few months, preceded by Ray Ozzie, the vendor’s chief software architect who left last October, Stephen Elop, president of the business division, who took Nokia Corp.’s chief executive slot last September, Robbie Bach, head of the entertainment and devices group, who departed last November and J Allard, senior vice president, design and development for the latter unit, who left last May.

No successor to Muglia has yet been named.

In his memo, Ballmer suggested that it was time for new blood to head the server and tools unit, specifically into cloud computing. While Muglia has been a supporter of the cloud, the products from his division are sold through licenses, a distinctly different business model than the subscription basis of cloud computing.

“We are now ready to build on our success and move forward into the era of cloud computing,” Ballmer wrote.

“Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth,” he said. “In this context, I have decided that now is the time to put new leadership in place for STB.”

While Ballmer seemed to dismiss any suggestion that he had ousted Muglia over business differences, he hinted that new leadership was required to take the company further into cloud computing.

“This is simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles,” he said.

In an e-mail written to employees in Microsoft’s server and tools business, posted here by veteran Microsoft watcher Mary-Jo Foley, Muglia issued full-on support for the cloud.

“I am incredibly excited by the emergence of cloud computing, and the opportunity it represents to shape business and the way people live for years to come,” he wrote. “I have deeply enjoyed my role in positioning Microsoft as a leader and innovator in cloud computing.”

Server and tools is Microsoft’s third largest business unit behind the Windows and Business divisions, each of which generates about $18.5 billion annually in revenue. The unit builds Windows Server, SQL Server database, ForeFront security products and other products.

TAGS: cloud computing,Microsoft,server,Ballmer,Muglia



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