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Appeared on: Tuesday, January 11, 2011
Microsoft Ousts Server Unit Head

Microsoft Chief Executive Steve Ballmer has ousted the head of the company's server unit, Bob Muglia. This is the latest in a series of high-level departures as the software company tries to regain its leadership in the technology sector.

Bob Muglia will stay on until this summer to help his replacement take over the running of Microsoft's Server and Tools business (STB). The unit sells server and database software to companies.

Steve Ballmer's e-mail to Microsoft's employees on Bob Muglia transition indicates Muglia was pushed aside in a disagreement over strategy.

"The best time to think about change is when you are in a position of strength, and that's where we are today with STB - leading the server business, successful with our developer tools, and poised to lead the rapidly emerging cloud future. 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 for STB. This is simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles. Bob has been a phenomenal partner throughout this process, and he and his leadership team have the right strategy in place," Ballmer said.

Bob Muglia has been a founder and leader of Microsoft's server business from its earliest inception. He has led the company's Developer, Office, and Mobile Devices Divisions, and key parts of Windows NT and Microsoft's Online Services business. I

"We enter this new decade with STB providing the platform for today's business solutions, and uniquely well-positioned to drive the future of cloud computing. I believe STB will continue to lead the industry with outstanding products and services for our customers and exceptional results for our business," Steve Ballmer said.

In the last 15 months, Microsoft has lost chief software architect Ray Ozzie, office unit head Stephen Elop, entertainment and devices unit head Robbie Bach and Chief Financial Officer Chris Liddell.

Microsoft's server and tools business has been growing steadily over the past few years, and is leading the company's push into "cloud computing." However, it has struggled to eat into the lucrative market for "virtualization," or providing operating systems over the Web, which has been dominated by rival VMware Inc. The company has been also seeking for a buyer in the server and database sector, where Oracle and SAP are dominating.


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