* Server unit head Bob Muglia to leave this summer
* No replacement named
* Latest in line of high-level departures
(Adds analyst quote)
By Bill Rigby
SEATTLE, Jan 10 Microsoft Corp (MSFT.O) Chief
Executive Steve Ballmer has ousted the head of the company's
server unit, marking the latest in a series of high-level
departures as the software company tries to regain its
leadership in the technology sector.
Bob Muglia, a 23-year veteran of the company, will stay on
until this summer to help his eventual replacement take over
the running of Microsoft's $15 billion a year Server and Tools
business. The unit, its third-largest, sells server and
database software to companies.
An internal memo from Ballmer indicates Muglia was pushed
aside in a disagreement over strategy.
"Bob Muglia and I have been talking about the overall
business and what is needed to accelerate our growth," Ballmer
wrote in the memo, which was made public. "In this context, I
have decided that now is the time to put new leadership in
place for STB (the server and tools business)."
No replacement has been named. Ballmer said he would look
for candidates inside and outside the company.
"It sounds like he was asked to leave," said Sid Parakh,
analyst at McAdams Wright Ragen. "It seems like there was
disagreement over strategy."
Muglia, a well-respected Microsoft veteran, could well
reappear at another company.
"We expect Muglia to be on the list for many senior level
technology positions," said Wells Fargo analyst Jason Maynard.
Overtaken by Apple Inc (AAPL.O) as the world's most
valuable tech company last year and stung by a stagnant stock
price for the last decade, Microsoft has been shaking up its
top leadership for several years.
In the last 15 months alone, the company 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.
Of the leaders of its five business divisions, only online
chief Qi Lu retains the role he had two years ago.
Microsoft's server and tools business, smaller than only
its flagship Windows and Office units, has been growing
steadily over the past few years, and is leading the company's
push into "cloud computing," or selling access to storage and
computing power online.
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 (VMW.N).
Microsoft has long been considered a buyer in the server
and database sector, but analysts said it was hard to see an
Its main rivals in the business are Oracle Corp ORCL.O
and Germany's SAP (SAPG.DE). Microsoft Chief Financial Officer
Peter Klein said last year that the company had looked into
buying SAP five years ago, but was not looking to do a deal
In October, there was talk that Microsoft might make an
offer for Adobe Systems Inc (ADBE.O), maker of the Flash media
player and Acrobat document software. Adobe shares rose 2.9
percent on Monday in a broadly flat Nasdaq.
Microsoft's shares closed down 1.3 percent at $28.22 on
Nasdaq. They are trading about the same level as they did 10
(Reporting by Bill Rigby; Editing by Gunna Dickson, Richard
Chang, Gary Hill)