Microsoft's Muglia's Departure Part of Larger Executive Drain

Microsoft’s executive-level departures have continued into 2011, with the announcement that Bob Muglia, president of the Server and Tools Business, will depart the company this summer. Muglia is a two-decade veteran of the company.

“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,” Microsoft CEO Steve Ballmer wrote in a Jan. 10 e-mail to company employees. “We are now ready to build on our success and move forward into the era of cloud computing.”

Ballmer apparently held talks with Muglia “about the overall business and what is needed to accelerate our growth” and came to the decision that “now is the time to put new leadership in place for STB.”

Rather than a sign of trouble within the division, Ballmer framed the leadership change as “simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles.” Muglia will continue to run the division until summer, while Ballmer conducts “an internal and external search for the new leader.”

Despite praising Muglia’s skills, including “customer focus, technical depth, people leadership skills and … positive energy,” Ballmer also neglected to discuss the rationale behind his decision. 

Throughout 2010, a number of Microsoft executives decided to jump ship, sparking discussion of whether the company was experiencing a bona fide brain drain. In October, Ballmer announced that Chief Software Architect Ray Ozzie had decided to resign from his post. “The CSA role was unique, and I won’t refill the role after Ray’s departure,” the CEO wrote in an Oct. 18 e-mail to the company.

As with Muglia, Ballmer positioned Ozzie’s departure as taking place within the context of a maturing product segment. “With our progress in services and the cloud now full speed ahead in all aspects of our business, Ray and I are announcing today Ray’s intention to step down from his role as chief software architect,” Ballmer wrote. “Following the natural transition time with his teams, but before he retires from Microsoft, Ray will be focusing his efforts in the broader area of entertainment where Microsoft has many ongoing investments.”

In September 2010, Microsoft Business Division President Stephen Elop stepped down to take the CEO reins at Nokia. Earlier in the year, a shakeup in Microsoft’s Entertainment & Devices Division saw the simultaneous departures of Robbie Bach, president of that unit, and J Allard, its senior vice president of design and development. The latter two executives’ departures were framed as personally motivated, but speculation abounded that the division's underperforming products—notably the Kin social-networking phones, which crashed and burned in the marketplace—forced their resignations.

With the end of the year, much of the pundit discussion over a possible Microsoft “brain drain” seemed to die down. But Muglia’s leaving will probably reignite the debate over what’s happening in Redmond’s leadership suites.