 |
Bob Muglia, the president of Microsoft’s Server and Tools business is out and it looks like he has been pushed:
Bob Muglia, head of servers and tools, is leaving Microsoft this summer.
In a memo to employees, Steve Ballmer says he’s conducting a search internally and externally for a replacement.
He also says, "I have decided that now is the time to put new leadership in place for STB," which makes it seem like he’s tossing Muglia.
Server and tools is Microsoft’s third biggest businesses. It generated $4 billion in revenue last quarter.
Click through for the full text of Ballmer’s memo but here’s the pertinent clip:
The best time to think about change is when you are in a position of strength, and that’s where we are today with STB – leading the server business, successful with our developer tools, and poised to lead the rapidly emerging cloud future. Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth. In this context, I have decided that now is the time to put new leadership in place for STB. This is simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles. Bob has been a phenomenal partner throughout this process, and he and his leadership team have the right strategy in place.
In conjunction with this leadership change, Bob has decided to leave Microsoft this summer.
Sounds like he was definitely pushed. I have often said that Server and Tools gets no respect at Microsoft while it has built success after success in a much more competitive environment than that facing the other Microsoft cash cows of Windows (client) and Office and this is apparently just more of the same. One surely has to wonder what Ballmer is thinking since there are numerous other areas in Microsoft that could really use a shakeup. Anyhow, Muglia gets to run the operation until a new leader is found and then bring him/her onboard before departing.
Steve Ballmer has announced that Microsoft Chief Software Architect Ray Ozzie is leaving and that his post will not be filled.
With our progress in services and the cloud now full speed ahead in all aspects of our business, Ray and I are announcing today Ray’s intention to step down from his role as chief software architect. He will remain with the company as he transitions the teams and ongoing strategic projects within his organization – bringing the great innovations and great innovators he’s assembled into the groups driving our business.
Woody Leonhard at Infoworld says "Ray Ozzie’s leaving Microsoft: What took him so long?" and Joe Wilcox opines that the problem was that Ozzie really wasn’t one of Steve Ballmer’s boys. Take the money and run, Ray – there are lots of places where you can do interesting technical work.
Microsoft today announced 3 new division presidents ostensibly to fill the voids left by the departures of Robbie Bach (Entertainment and Devices) and Stephen Elop (Business). However, it mostly looks like the temporary scheme which had the former direct reports to the division presidents reporting to Steve Ballmer has been institutionalized with some promotions:
In a statement this morning, the company said it is naming Kurt DelBene to head the Microsoft Office Division, Don Mattrick to head the Interactive Entertainment Business, and Andy Lees to head the Mobile Communications Business, effectively leaving things as they have been following the departure of Stephen Elop (who was named Nokia CEO last month) and the announced retirement of Robbie Bach.
…
DelBene’s group, which is focused on the Office set of products, is somewhat narrower in focus than the one vacated by Elop, which also included the Microsoft Dynamics line of customer relationship management and enterprise resource planning products for midsize businesses. The Dynamics business will continue to be headed by Kirill Tatarinov, who will report to Ballmer.
The moves essentially leave all of Microsoft’s businesses in largely the same hands they have been in. Lees and Mattrick have been running their units since Bach announced plans to retire in May. Following Elop’s departure, DelBene has been jointly running Office with fellow executives Chris Capossela and unit CFO Amy Hood. Capossela, the longtime head of Office marketing, and Hood will remain in their roles, reporting to DelBene.
And even more evidence that there is less here than meets the eye: the five business unit financial reporting structure will stay the same.
NPD and Morgan Stanley Research are reporting that notebook PC sales growth (monthly year over year) has been in decline since Apple’s iPad was released and now has gone negative. There are undoubtedly a number of factors at work, but the iPad is surely a major one. Best Buy CEO Brian Dunn “said internal estimates showed that the iPad had cannibalized sales from laptop PCs by as much as 50 percent.”
While this is certainly hard cheese for the PC makers, there is someone else who is taking it on the chin: Microsoft. Almost all of those laptops PCs that didn’t move were running the Windows operating system and many would pick up some version of Microsoft Office as well. Those sales have now vanished and when the Microsoft Windows and Office cash cows stumble, so does Microsoft. Stand by for some interesting earnings reports from Redmond.
Update: There’s a lot of skepticism about Best Buy CEO Brian Dunn’s statement and he’s now backpedaling rapidly without denying he said it. I tend to think it was simply a misstatement since the implied hit on notebooks sales is so much larger than the Morgan Stanley report would require. Speaking of which, a comment from the author of the Morgan Stanley article says that the sales figures showing the decline include netbooks. That is better news for traditional PC makers, but since most netbooks these days run Windows, it is cold comfort for Microsoft.
