Microsoft exec shakeup could be over Silverlight, cloud, or burnout

The impending departure of Microsoft’s Bob Muglia, president of the company’s Server and Tools Business, from the software giant has analysts speculating about reasons ranging from dissatisfaction on the cloud computing front to just plain executive burnout.

A 23-year veteran of Microsoft, Muglia’s exit this summer was revealed in a memo by company CEO Steve Ballmer on Monday. “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 at STB,” said Ballmer, who nonetheless insisted Microsoft was in a position of strength in the STB business.

Analysts speculated on a range of causes for the shakeup. “I think in some ways it’s based on some frustration that maybe they’re not moving as fast to the cloud as Microsoft would like,” said analyst Jeffrey Hammond, of Forrester Research. Although the company’s Windows Azure platform is progressing nicely, it may not be making the kind of headway Microsoft sees with rival Amazon’s EC2 (Elastic Compute Cloud), said Hammond.

There also could be frustration with last fall’s confusion over the Silverlight rich Internet application plug-in platform, in which Muglia spoke of a new direction for Silverlight. That resulted in confusion over whether Microsoft was still committed to Silverlight. “That was kind of a gaffe that caused a lot of problems for Microsoft. I think they’ve recovered,” said Hammond.

Microsoft declined to provide comment beyond Ballmer’s memo, which did emphasize the company’s moving into “the new era of cloud computing.”

Rob Horwitz, who is co-founder of the newsletter Directions on Microsoft and a former colleague of Muglia at Microsoft, called the departure a surprise but did note Muglia’s long tenure at the company. “He has been there 23 years, and there could be some element of burnout or just wanting to work in a different environment,” he said.

“In general, I think Muglia’s done an amazing job,” Horwitz said. Muglia has had to deal with possible conflicts like pushing cloud computing, which is about getting users off of on-premise systems, and promoting Microsoft’s systems management tools, which are about managing on-premise systems, Horwitz said. “I could see a big challenge to how do you grow both those businesses when they’re pulling in different directions,” he said.

Muglia’s departure could be related to an internal competition for grooming of successors, said analyst Al Hilwa of IDC. “That always leads to people leaving, depending on the way the winds are blowing,” he said. “Microsoft is a big company. They look up to big companies like GE or IBM, for example,” from a management perspective, said Hilwa. Those companies develop succession strategies early, he said.

“I think it may be Ballmer prefers to bring in someone from the outside versus somebody from the inside” to groom as a successor down the road,” Hilwa said. He also cited the departure of chief technologist Ray Ozzie and the shift to cloud computing responsibility from Ozzie to Muglia as possibly creating internal tensions. Hilwa doubted the Silverlight issue was a factor in Muglia’s leaving.  

But for customers, management changes just mean the “show goes on,” Hilwa said. “At the end of the day, they don’t matter to customers much,” he said.

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