Microsoft Prez, Belluzzo, to Leave Company

Departure is part of a restructuring that divides the company into seven separate groups.

Microsoft Corp. announced Wednesday that President and Chief Operating Officer Rick Belluzzo will leave the software company as part of a company restructuring.

In the announcement, Microsoft said Belluzzo will "transition out of his role as president and chief operating officer on May 1, although he will continue to work at the company through September to ensure a smooth transition."

This move was part of a broad organizational restructuring, which divided the company into seven groups: Windows Client (headed by Group Vice President Jim Allchin); Knowledge Worker (under Group Vice President Jeff Raikes); Server & Tools (under Senior Vice President Brian Valentine and Senior Vice President Eric Rudder); Business Solutions (under Group Vice President Orlando Ayala); CE/Mobility (headed by corporate Vice President Pieter Knook); MSN (under Senior Vice President David Cole); and Home & Entertainment (under Senior Vice President Robbie Bach).

In a statement, Microsoft CEO Steve Ballmer said Belluzzo had worked closely with him analyzing the companys structure to determine how it could im-prove its internal processes and maximize opportunities for growth.

"We realized we needed to give our core leaders deeper control and account-ability in the way they run their businesses, while at the same time ensuring strong communication and collaboration across the business units. This is the right decision for Rick, but the company will certainly miss his leadership and ex-perience," Ballmer said.

A Microsoft spokeswoman told eWEEK late Wednesday that Belluzzo will be helping to determine the precise rollout of the new groups and the additional accountability and responsibility of its leadership in his remaining months with the company.

The Redmond, Wash., software company has no intention of hiring a replacement for Belluzzo for either position. "This is the elimination of the role of president and, in helping to design this new leadership structure at Microsoft, Rick essentially participated in organizing himself out of a job," the spokeswoman said.

Part of Belluzzos recommendation was to drive more accountability and decision-making into the new business groups. So, the structure as Belluzzo and Ballmer defined it, does not require a president. Some of that functionality and responsibility will now be undertaken by Ballmer, she said.

At this time Microsoft also will not appoint or have a COO, "and in any case they mutually agreed that was not a job Rick [Belluzzo] wanted," she said. "That role will either be taken up by Steve [Ballmer] or driven into the responsibilities of the heads of the seven business groups, who will be charged with additional decisions around revenue and cost control.

"The message Steve is sending these leaders is that in order to be really good at being a good company we need to be making these decisions a little closer to the customer and line of business. So the leadership is going to have to do more of the business management than they previously have," she said.

Microsoft Chairman and Chief Software Architect Bill Gates added that Belluzzos leadership on improving internal business systems and his role in the development of key product initiatives, including .Net, MSN and Xbox, "were very significant contributions."

In a prepared statement Belluzzo said that "given where Steve and I knew we needed to take the business, I decided it was the right time to pursue my goal of leading my own company. Im proud of what Ive accomplished at Microsoft, and I will miss the great people Ive worked with over the past several years," he said.

Dwight Davis, an analyst for Summit Strategies Inc. in Seattle, said Belluzzo had always been overshadowed by former Microsoft presidents Gates and Ballmer. "I think he was completely eclipsed by these two personalities. It was also never clear to me exactly what his role as president was in addition to his function as COO, a position he took over from Bob Herbold," he said.

The position of president was an amorphous one at most firms, and even more so at Microsoft. "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 anytime soon. But this could also be a cover for something else internally," Davis said.

But the Microsoft spokeswomen denied there was any rift or disagreement between Belluzzo and other Microsoft management, saying he and Ballmer were pretty much in alignment "that this was the direction that the company needed to go," she said.

Belluzzo joined Microsoft in September 1999 as a group vice president and was promoted to president and COO in February 2001. In that role he was responsible for overseeing worldwide sales and marketing, directing business operations including Human Resources, Finance and Licensing, and overseeing Microsofts games and TV platform efforts.