Belluzzo Out of Microsoft

By Peter Galli  |  Posted 2002-04-08 Print this article Print

Industry partners and Microsoft Corp. insiders were not surprised by the announcement last week of the planned departure of President and Chief Operating Officer Rick Belluzzo, who will leave the software company as part of a restructuring.

Industry partners and Microsoft Corp. insiders were not surprised by the announcement last week of the planned departure of President and Chief Operating Officer Rick Belluzzo, who will leave the software company as part of a restructuring.

Belluzzo, a former executive at two hardware companies, Silicon Graphics Inc. and Hewlett-Packard Co., was considered an odd choice when Microsoft CEO Steve Ballmer brought him on board in the fall of 1999.

"In his public appearances, it was apparent that he didnt know much [about software]," said a source close to Microsoft who requested anonymity. "The feeling was that he was a close personal friend of Ballmers and that Ballmer had let that influence him."

Belluzzos departure is part of a restructuring that partitions Microsoft into seven groups: Windows Client, Knowledge Worker, Server & Tools, Business Solutions, CE/Mobility, MSN and Home & Entertainment.

Officials said last week that Belluzzo will leave his posts May 1, "although he will continue to work at the company through September to ensure a smooth transition."

Microsoft insiders said that since Ballmer took the CEO reins from Chairman and Chief Software Architect Bill Gates in February last year, it has become apparent that there were two Microsofts: Gates "technogeeks" and Ballmers Harvard MBA management types. "More and more, Microsoft is Steves show. Look at all the housecleaning that has occurred under his reign as CEO," a source said.

Microsoft insiders said Belluzzo was held responsible for the fact that the rollout of Microsofts first hosted Web services, called .Net My Services, was delayed as executives scrambled to find a workable business model for them.

The lack of confidence in Belluzzos abilities was further evident when the responsibility for MSN and the wireless groups was shifted from him and as Ballmer insisted on more accountability for each group at its immediate leadership level, sources said.

Microsoft has no plans to hire a replacement for Belluzzo for either position, according to a spokeswoman.

Dwight Davis, an analyst for Summit Strategies Inc., in Seattle, said Belluzzo has been overshadowed by Gates and Ballmer. "It was also never clear to me exactly what his role as president was in addition to his function as COO," Davis said. "There certainly may be some merit to his desire to lead a company. He certainly didnt do so at Microsoft, and there was little likelihood of that changing any time soon."

Additional reporting by Mary Jo Foley, Baseline

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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