One of Microsoft’s core strengths is their Server and Tools Business (STB). In fact, it’s a $15 billion a year business for the giant. CEO Steve Ballmer cited that number today in an email to employees announcing the departure of the head of that division, Bob Muglia.
So why is Muglia leaving such a successful endeavor he built? Because Ballmer decided it was time for a change.
“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,” Ballmer writes. “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,” he continues.
Translation: it’s time to get serious about the cloud before it’s too late.
Not surprisingly, rather than accept a demotion, Muglia will leave Microsoft . That will happen this summer, Ballmer says.
Actually, it is a little surprising because Muglia had been demoted before within the company — but worked his way back in 2009. As we noted two years ago:
Capping a comeback from a demotion in the wake of Hailstorm’s failure to survive a privacy challenge led by bloggers, Server and Tools senior VP Bob Muglia was promoted to President of the Microsoft group. Muglia now commands a Microsoft unit with some 22% of the company’s $60 billion in revenue.
That promotion put Muglia in a “Gang of Four,” as we wrote at the time. That include a power combination of Entertainment chief Robbie Bach, Office Business czar Stephen Elop, and Online Services Group head Qi Lu. All but one of those men (Lu, who had just joined) is now gone from Microsoft just two years later. (Also gone, of course, is Ray Ozzie.)
You may recall that Muglia got himself in a bit of hot water in the press once again a few months ago when comments he made suggested that one technology he was in charge of, Silverlight, was being pushed out in favor of technologies like HTML5. The backlash was fast and furious and Microsoft had to respond, and backtrack.
“[Muglia] will continue to actively run STB as I conduct an internal and external search for the new leader. Bob will onboard the new leader and will also complete additional projects for me,” Ballmer writes.
Below, find Ballmer’s full email to the troops:
From: Steve Ballmer
Sent: Monday, January 10, 2011
To: Microsoft – All Employees
Subject: STB – Building on Success, Moving Forward
There are very few $15B businesses in the software industry, and Microsoft is the only company that has built three of them. While Windows and Office are household words, our Server and Tools Business has quietly and steadily grown to be the unquestioned leader in server computing. We have driven the industry forward and established the foundation for an entire generation of business applications. We have overcome significant competitive challenges. Over the past twenty years, the outstanding leadership from everyone involved in STB has made it a $15B business today.
We are now ready to build on our success and move forward into the era of cloud computing. Once again, Microsoft and our STB team are defining the future of business computing. In October, we completed an incredibly successful PDC where we detailed the future of the cloud, outlining Platform as a Service and demonstrating the rapid advancement of Windows Azure.
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. He will continue to actively run STB as I conduct an internal and external search for the new leader. Bob will onboard the new leader and will also complete additional projects for me.
Bob has been a founder and leader of our server business from its earliest inception. He has led our Developer, Office, and Mobile Devices Divisions, and key parts of Windows NT and our Online Services business. I’ve worked with him in many capacities over the years and I’ve always appreciated his customer focus, technical depth, people leadership skills, and his positive energy. I want to thank Bob for his hard work, many accomplishments, and his focus on putting Microsoft first for 23 years.
We enter this new decade with STB providing the platform for today’s business solutions, and uniquely well-positioned to drive the future of cloud computing. I believe STB will continue to lead the industry with outstanding products and services for our customers and exceptional results for our business.