January 11, 2011

Microsoft Exec Exodus Continues

Microsoft Corp. announced on Monday that Bob Muglia, who led the company's server and tools division, will leave the company this summer at the behest of Chief Executive Officer Steve Ballmer.

Muglia, who has worked for the Redmond, Washington-based company for 23 years, will continue to actively run the $15 billion Server and Tools business (STB) while Microsoft searches for his replacement, said Ballmer in an e-mail sent to employees on Monday.

"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," wrote Ballmer, suggesting that Muglia may have been pushed aside in a disagreement over strategy.

"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," he wrote.

Microsoft's STB, which includes database software, the Azure cloud-computing programs and a version of Windows software for corporate networks, is the company's third-largest unit, exceeded in size only by its flagship Windows and Office divisions.

Analysts say that Muglia is well respected within the industry, and could well reappear at another tech firm.

"We expect Muglia to be on the list for many senior level technology positions," said Wells Fargo analyst Jason Maynard during an interview with Reuters.

Muglia's dismissal is only the latest in a series of executive departures at Microsoft as the company works to regain its technology leadership position.  During the past 15 months alone, Microsoft has lost chief software architect Ray Ozzie, Business Division president Stephen Elop, Entertainment and Devices Unit president Robbie Bach and Chief Financial Officer Chris Liddell.

Qi Lu, president of Microsoft's Online Service's Division, is the only division head remaining in the same role he held two years ago.

Apple Inc. surpassed Microsoft as the world's most valuable tech company last year, after years of Microsoft's stagnating stock price.

Shares of Microsoft's stock were down 1.3 percent on Monday, closing at $28.22 on the Nasdaq, about the same level as a decade ago.


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