Why did Microsoft's Steve Ballmer publicly oust Bob Muglia?

Microsoft's announcement of the departure of Bob Muglia, the president of the company's server and tools business was surprising enough. But possibly just as unexpected was that in Steve Ballmer's memo about the move, he said that he had asked Muglia to give up his post --- that's the kind of thing usually not mentioned in public. What gives?

By all accounts, Muglia's stewardship of the Server and Tools Business (STB) has been a success. According to TechFlash:

The division posted 5 percent revenue growth last fiscal year, accounting for nearly 24 percent of the company's overall $62.48 billion in annual revenue. Server & Tools posted 12 percent revenue growth in Microsoft's most recent quarter, returning to the double-digit growth rates the division saw prior to the recession.

The division is in charge of Windows Server operating system, SQL Server, and tools for software developers. Muglia, who has been at Microsoft for 23 years, was largely responsible for building it into the success it has become. Rob Horwitz of Directions on Microsoft told Daily Tech:

"He really did grow the third child --- the first is, of course, Windows, and Office is the second child. This is one of the three really successful moneymaking businesses growing in low double digits every single year against some stiff competition like Oracle."

Ballmer, in his announcement that Muglia was leaving the company, lauded Muglia's achievements. But then he went on to write:

"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."

For a CEO, it's surprisingly blunt to write: "I have decided that now is the time to put new leadership in place." Vaguer, gentler language is generally used.

Why the blunt talk? No one seems to know. And why is Muglia being let go when his division has been doing surprisingly well? Again, no one is sure. Rob Helm, managing vice president of the Directions on Microsoft told TechFlash:

"I'm shocked, honestly. It seems like a great loss at a really important time in the development of those products."

Some have speculated that Muglia and Ballmer disagree about the development and future of Microsoft's cloud computing platform, Windows Azure, but no details are available. So for now, at least, the departure remains somewhat of a mystery --- as is the blunt way that Ballmer handled it.

FREE Computerworld Insider Guide: Five IT certifications that won’t break you
Join the discussion
Be the first to comment on this article. Our Commenting Policies