Nearly a year ago Microsoft moved Doug Burgum into an an odd job as Chairman of Microsoft Business Solutions while they looked around for an executive to actually run the troubled agglomeration of small and medium business applications that they had assembled in a burst of acquisitions starting five years back. It looks like yesterday they finally found a volunteer in their own Satya Nadella:
Microsoft today announced that Corporate Vice President Satya Nadella has been selected to succeed Doug Burgum as the leader of Microsoft Business Solutions (MBS). For the last five years, Nadella has been responsible for MBS research and development (R&D) worldwide.
Burgum will leave the company at the end of the fiscal year in June 2007, but for some observers it isn’t soon enough:
According to his assessment (unbiased of course), the division is in “great shape”, having managed a whopping $24M profit this year (eeked out – conveniently – in the final Q of the fiscal year before ceasing to be a separate reporting entity) versus a $170M loss the year previously. Putting aside that I can’t recall a departing exec ever saying their division wasn’t in “great shape”, I guess Doug isn’t a math major because at that rate of profit, it would take some 44 years just to payback the initial $1.1B MSFT expended to purchase Great Plains (a company he founded and was CEO of). And of course, the Bus Sol buying spree didn’t end there and we’ve had years of significant ongoing losses.
So 3-4 years later, we’re left with another of those wonderful “shareholder value creation” stories that Ballmer is so fond of mentioning. Only, as usual, no obvious value has been created, but management has managed to chew through another $3-4B of shareholder money and detract from earnings (until recently) – thereby actually hurting EPS and the share price. Worse, it doesn’t appear to be on a trajectory that would alter that equation, or even just provide a payback, any time soon.
There’s more pointed commentary by following the link, but Mr. Burgum did fine in building Great Plains Software and selling it to Microsoft and he isn’t the first executive who had a hard time handling a mixed bag of companies assembled in a misguided corporate shopping spree. The blame for that has to go higher up.
Finally, as alluded to in the quote above, Microsoft Business Solutions results are no longer broken out separately in Microsoft financial statements, so outsiders will never really know if it ever turns the corner.
Ina Fried at CNET has the story, but here’s the net:
- Senior VP Orlando Ayala takes a new position reporting to COO Kevin Turner as head of the Emerging Segments Market Development Group which “is charged with spearheading efforts to ensure that Microsoft makes a real, positive difference to people and Governments all around the world as digital inclusion in underserved communities, both in emerging nations and developed countries, becomes an increasing fundamental for economic success in the global economy.” This sounds like a lot of PR smoothing the way for Microsoft sales in these untapped markets which have their own special problems.
- Eduardo Rosini takes Ayala’s old job as head of the Small, Medium Services and Partner group which handles sales to smaller businesses and the partner program. He was formerly the Regional VP in charge of Microsoft APAC, which is Microsoft’s Asia Pacific unit.
- Development of Dynamics CRM is moving from Microsoft Business Solutions into the Office Business Platform group headed by Kurt DelBene.
- Last but not least, Microsoft is still searching for a replacement for Microsoft Business Solutions honcho Doug Burgum, who announced plans in November to shift to an evangelist “chairman” role in MBS (see also ) once his successor was found. Could it be that leading the perpetually troubled MBS doesn’t look like much of an opportunity?
Jay Greene at Business Week provides an interesting analysis in Microsoft’s New Word: Accountability. Some snippets:
Execs at the software giant hate setting expectations, lest they slip. So the company has been mum on the date, saying only that Vista will launch some time in the second half of 2006. Analysts have taken that to mean a shipment date some time near Christmas.
It turns out, the company plans to ship much sooner. According to an internal blog by Chris Jones, one of Microsoft’s top Windows execs, the shipping target is Aug. 31.
Jones’s blog post appears to address the question of low morale head on. “If you want my personal accountability, I will not take a bonus if we don’t ship Vista with high quality and the soul intact by August 31st, 2006,” Jones writes in a Sept. 28 blog post that was obtained by BusinessWeek Online. “If there is more I can do, let me know.”
Indeed, Microsoft may be entering a period of greater accountability, something the company’s critics say is long overdue. The Vista deadline isn’t the only evidence. On Nov. 17, Microsoft announced that Doug Burgum is giving up his operational responsibility for the Microsoft Business Solutions group. He’ll become chairman of the division, which sells software that helps small and mid-sized companies run their businesses.
Microsoft was careful to avoid calling the move a promotion. As group chairman, Burgum will help build support among independent software developers. Burgum’s replacement, for whom the company is searching, will report to Burgum’s boss, Jeff Raikes — not Burgum.
Much more by following the link.
Nov. 17, 2005 – Microsoft today announced a leadership transition in which Doug Burgum, senior vice president, MBS business group, will assume the newly created role of chairman of Microsoft Business Solutions. In his new position, Burgum will continue to report to Jeff Raikes, president of the Microsoft Business Division.
Microsoft will launch a formal search for a new senior vice president of MBS. The new executive will also report directly to Raikes. Throughout the entire search and transition process, Burgum will continue to lead and drive the MBS business, and Orlando Ayala will remain chief operating officer of MBS and senior vice president of the Worldwide Small and Midmarket Solutions and Partners (SMS&P) group. The roles of the rest of the MBS senior leadership team will remain unchanged.
There’s more, but Ina Fried has a good summary at CNET:
Microsoft said Thursday that it is searching for a new leader for its Microsoft Business Solutions unit, which sells software to medium-sized businesses.
Doug Burgum, who has had financial responsibility for the division, will remain in a new role as chairman of the unit. However, the software maker aims to recruit someone else to oversee the unit’s financial performance.
In his new role, Burgum will be responsible for helping MBS be better understood within Microsoft, help with development of business leaders in the unit and act as an ambassador for the unit to partners and customers.