Executive Exodus Continues at Microsoft as Muglia Steps Down

Microsoft confirmed this week that its Server & Tools Business (STB) president, Bob Muglia, is leaving the company this year to pursue opportunities elsewhere. Muglia is a 23-year veteran of the software giant and has held the president position for two years. Based on internal email, it appears that Muglia was ousted by Microsoft CEO Steve Ballmer.

"Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth," Ballmer wrote in an email to company employees explaining his decision to relieve Muglia. "I have decided that now is the time to put new leadership in place for STB."

"In conjunction with this leadership change, Bob has decided to leave Microsoft this summer," Ballmer's message continues. "He will continue to actively run STB as I conduct an internal and external search for the new leader."

ZD's Mary Jo Foley believes that Muglia butted against some pending changes to the STB, though it's unclear what those changes might be. One thing is clear: As Microsoft switches to a largely cloud-computing-based product lineup, its STB has been ideally situated to make this change. And Muglia has led that business through the transition very nicely, rolling out not just new products like Azure, but also a host of services-based versions of Microsoft's traditional server products. As important, perhaps, Muglia guided the STB to a 50 percent increase in revenues and a 200 percent increase in income during his time as president of that business.

Muglia issued his own message to the troops, stating that his time at Microsoft was marked by integrity and results. "The coming months are a time of transition," he wrote. "During this time, I will be fully engaged in leading STB until new leadership is in place. After that, I will continue to do everything I can to help Microsoft, STB, and all of you."

According to Muglia's note, the transition to cloud-based services played no role in his departure. Indeed, he appears to be quite excited by this change.

Some speculate that Muglia's departure may in fact be tied more to the virtualization side of the business than to cloud computing. Microsoft infamously took on market leader VMware with its Hyper-V technology for Windows Server in 2008. But the software has grown only slowly so far, despite steady improvements.

Whatever the reason for his exit, Muglia is a tough loss. While other parts of the company have suffered at the hands of competitors like Google and Apple, the STB has delivered solid results again and again. One has to wonder why other division leaders haven't been held more accountable for their own failures. Certainly, one can easily point at other parts of the company as being more problematic, from strategy and financial perspectives.

Muglia is only the latest in a long list of executives who have departed Microsoft recently. Other recent notables include Chief Software Architect Ray Ozzie, Business Division President Stephen Elop, Entertainment and Devices Unit President Robbie Bach, and Chief Technology Officer J. Allard. And what else do all of these men have in common? All of them previously reported directly to CEO Steve Ballmer.

TAGS: Windows 8
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