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cloud computing, microsoft, software development

Microsoft’s new President of Server and Tools–Satya Nadella, from Bing division

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.

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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.

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Bob Muglia leaving Microsoft, CEO Steve Ballmer searching for new cloud leadership

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Microsoft has announced that Bob Muglia, President of Server and Tools, is leaving Microsoft.

In his memo, Steve Ballmer says:

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.

It is always hard to tell from the outside, but in my encounters Muglia has been among the most articulate and confident of Microsoft’s top executives. I have also noticed in my regular look at Microsoft’s financials that the Server and Tools business has performed consistently well for as long as I can remember.

Most recently, Muglia took over the Azure business and seemed to know where he was going with it. He is also responsible for developer tools, and while his remarks about Silverlight at Microsoft’s PDC in November were disappointing to developers on that platform, they showed a clear sense of direction.

In this context, it seems surprising that Ballmer is in search of “new and different talent”. It does sound as if Ballmer and Muglia do not see the future of the cloud business – which is the focus of the memo – in the same way.

The key question: in what way did Ballmer and Muglia’s vision differ? I guess we will get some more clues as today’s news is discussed.

Update: Mary Jo Foley has posted Bob Muglia’s internal email to his team:

Later this year, I’m moving on to new opportunities outside of Microsoft, so I wanted to take a few minutes to share with you what’s important to me in life and leadership.

The foundation of who I am is based on living with integrity. Integrity requires principles, and my primary principle is to focus on doing the right thing, as best I can. The best thing, to the best of my ability, for our customers, our products, our shareholders, and of course, our people.

Just sugar, or did Muglia feel that staying at Microsoft would compromise those principles?

Since the announcement, the reaction across the industry has shown the high regard in which he is held, and bewilderment at why he is being let go. Here’s Redmonk analyst James Governor on Twitter:

Another exit: Microsoft server chief Muglia leaving company normally i say so what but this is TERRIBLE for microsoft