Microsoft taps replacement for Muglia to run server division

Satya Nadella moves from Online Services Division to head cloud efforts

Microsoft has chosen a replacement for ousted Server & Tools Business (STB) division head Bob Muglia as the next step in chief executive Steve Ballmer's "let the geeks help me save my job" turnaround plan. It's 19-year Redmond veteran Satya Nadella, a senior vice president who most recently was in charge of engineering efforts for Microsoft's Online Services Division. (Also see: Ballmer turns to geeks to save his own butt) As I wrote Tuesday (see link above), Bloomberg reports that Ballmer "plans to extend a management shake-up aimed at adding senior product executives with an engineering background" to quiet complaints from Microsoft's board and investors over the company's poor showing in emerging markets. Ballmer last month canned Muglia, a 23-year Microsoft veteran, presumably because he was dissatisfied with the company's efforts in the cloud-based services market. Some observers feel Muglia, a proponent of cloud in general and Microsoft's Azure Services Platform in particular, was a fall guy for Ballmer. Muglia initially was going to stay until the summer to run STB, which generated $14.9 billion in revenue for Microsoft last year. He'll probably depart a bit sooner now. In making Wednesday's announcement, Ballmer said, "We’re already making strong traction across our Server and Tools Business by embracing cloud services. Satya has deep experience in both our server business and online services, which will help accelerate our momentum while setting the course to deliver the cloud computing scenarios of the future." For his part, the 43-year-old Nadella said, "Our server and tools business is one of the fastest growing and most profitable businesses at Microsoft. I see great opportunity for Microsoft to grow the business and also lead the way in the transformation of enterprise IT. I’m excited to work with such a high-caliber team to chart the path for our continued success today and growth in the future." "Already making strong traction." "One of the fastest growing and most profitable businesses at Microsoft." No wonder they got rid of Muglia. He was really messing up! I know, those quotes are all corporate-speak, and maybe there had to be a change made in STB. From the outside, it's difficult to tell. But it's hard to escape the feeling that Microsoft's real problem starts right at the top.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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