Microsoft has appointed a new President of Server and Tools to replace Bob Muglia. He is Satya Nadella, 43, and has been leading the Online Services Division, the bit in charge of Bing, MSN and adCenter. Before that, Nadella led Microsoft Business Solutions, focused on the Dynamics CRM application.

It is a big role, and no doubt it is significant that Nadella has a cloud-oriented background within Microsoft. In his first memo in the new role, Nadella says:

I like to have my head in the clouds and feet on the ground (something I learned from Qi).

I track Microsoft financials in a small way, and have observed that while Muglia’s Server and Tools has turned in stellar figures for several years, the Online Services Division by contrast has delivered large losses.

Then again, competing with Google in search is not easy, and Bing is perhaps doing as well as can be expected.

CEO Steve Ballmer has also announced that Amitabh Srivastava, the well-regarded senior vice president in the Server and Tools Business is leaving Microsoft.

Puzzling moves, which suggest to me significant strategy disagreements between Ballmer and the old Server and Tools leadership.