Microsoft OEM Exec Steps Down as Surface Tablet Plans Gel

Steven Guggenheimer, the vice president of Microsoft's OEM group, has stepped down as Microsoft solidifies its plans for Windows 8 and its Surface tablet PC.

The executive who has led the charge for Microsoft€™s Windows original equipment manufacturing (OEM) business for the last several years is stepping away from the position just as the company is facing scrutiny from PC makers after announcing plans to sell its own Windows 8-branded tablets.

As reported by BloombergBusinessweek, Steven Guggenheimer, corporate vice president of Microsoft€™s OEM division, is leaving the position to be replaced by Nick Parker, who has had a key marketing role in the OEM group. Guggenheimer is going on sabbatical and is expected to return to a leadership position at Microsoft upon his return, the company said. Guggenheimer ran the Microsoft OEM business for more than four years.

Microsoft spokesman Frank Shaw said Guggenheimer€™s exit had nothing to do with Microsoft€™s tablet PC plans. In a statement to Bloomberg, Shaw said: €œAs a result of long-term planning, Steven Guggenheimer will move on from his current role as CVP of the OEM Division effective July 1, to coincide with the start of Microsoft€™s fiscal year. He is taking on a new senior leadership role at the company, and further details will be provided when finalized.€

Microsoft surprised the industry with its June 18 Surface tablet PC announcement. That Microsoft planned to market its own hardware systems caught many by surprise, not least of all OEMs who were only briefed on the strategy just days before the announcement in Hollywood.

Although Microsoft€™s Shaw said the Guggenheimer move had long been in the works, some observers were skeptical.

€œI'm not a big believer in coincidence,€ said Jonathan Yarmis, founder of the Yarmis Group research firm. €œI don't, however, view this as a punishment for a bad decision but rather a convenient confluence of events. Clearly Microsoft knew Guggenheimer's credibility with the OEMs would be shattered with a move like this. So he was going to have to move on. This is probably the most graceful way of doing it. He just disappears for six months. If you're an OEM, who are you going to yell at now? His successor will say all the right things about how our partners are important to us, how we need to rebuild trust.€

Meanwhile, Microsoft€™s move has had repercussions with some OEMs. As eWEEK€™s Chris Preimesberger noted in a recent piece:

"Because Surface will now be Microsoft's home-grown ARM-based tablet device of choice to run all those all-too-familiar Windows business and consumer applications natively, HP, Dell and a score of other OEMs are moving to Plan B. Instead of being able to run the promising Windows RT operating system for ARM devices, they must fall back to the forthcoming Windows 8 for x86-based devices."

Microsoft is expected to release Windows 8 to manufacturing (RTM) in July and make it generally available in October. Microsoft has said publicly that Windows RT-based machines will be available when Windows 8 is released. And Microsoft is not expected to be the only company shipping Windows RT-based machines at the release of Windows 8, as Asus and Toshiba have committed to this.

€œI actually applaud Microsoft's calculated gamble here,€ Yarmis said of Microsoft keeping its Surface tablet plans close to the vest. €œFirst of all, it's almost shocking that they could keep this a secret. This is something Apple does, not Microsoft. If the theme of this whole thing is the Apple-ification of Microsoft, they executed surprisingly well on this one. Further to that gamble is their belief that where are the OEMs going to go for an operating system anyhow? We see how well that worked for HP. So I think Microsoft ultimately bet that after some hand-wringing, ultimately the OEMs will fall in line. This approach probably had as much to do with Samsung as anyone else. They're the growing third (or fourth) party in this conversation. Microsoft, Apple, Google, Samsung. And keeping the strategy from them was probably a wise decision and one that will eventually be understood and accepted by Microsoft's other €˜partners.€™"

This article was updated to include comments from industry analyst Jonathan Yarmis.