News

Microsoft Appoints Nadella as Server and Tools Head

• By Kurt Mackie
• February 09, 2011

Microsoft today announced the appointment of Satya Nadella as president of the company's Server and Tools Business.

The promotion of Nadella comes exactly one month after a transition announced by Microsoft CEO Steve Ballmer in January, in which Bob Muglia was to step down from the Server and Tools president position. Muglia, a 23-year Microsoft veteran, will stay on until the summer, helping Nadella with the new post.

Nadella's responsibilities in heading the Server and Tools Business segment include overseeing the Windows Azure platform, along with products such as Windows Server, System Center and Visual Studio, among others. However, he also has a cloud visionary role to fulfill.

Satya Nadella, president of Microsoft's Server and Tools Business.

"Nadella and his team are tasked with leading Microsoft's enterprise transformation into the cloud and providing the technology roadmap and vision for the future of business computing, while helping our customers and partners make the transition to the cloud platform by providing the necessary solutions, services and tools," his Microsoft bio states.

The transition of Nadella into the post caused some other ripples. Amitabh Srivastava, senior vice president in the Server and Tools Business, will leave Microsoft, according to a memo posted today from Ballmer. Nadella has appointed Bill Laing, corporate vice president of Microsoft's Server and Cloud Division, to fill in for Srivastava in the interim. Laing formerly reported to Srivastava.

Srivastava was promoted in December of 2009 to lead a then-newly formed Server and Cloud Division at Microsoft, where he served under Muglia. The idea behind that effort was to more closely integrate Microsoft's Windows Azure cloud offerings with Windows Server solutions.

Nadella, a 19-year Microsoft veteran, previously served at Microsoft's Online Services Division as senior vice president of R&D. That division, headed by President Qi Lu, oversees Microsoft's Bing search engine, online advertising platforms and the MSN Web portal. Nadella also has earlier experience leading the Microsoft Business Solutions segment, which is responsible for the Microsoft Dynamics line of enterprise resource planning and customer relationship management products.

The executive changes at Server and Tool Business represent "a clean sweep in the Microsoft cloud," according to Rob Helm, managing vice president at the Directions on Microsoft consultancy. The changes come as Microsoft begins to initiate "major technical upgrades" to its online services and platforms, he added.

"Satya Nadella seems to be an executive for 'big plays,' such as the push against Google, and the Project Green consolidation project for Dynamics business management applications," Helm stated in an e-mail. "By putting him in charge, Steve Ballmer seems to be looking for something more than the slow, steady growth that Server & Tools has shown over the past few years."

Microsoft reported last month that its Server and Tools Business brought in $4.4 billion in revenue per the company's fiscal second-quarter 2011 earnings. That figure represents a 10 percent improvement over the previous year's 2Q revenue earnings.

The rationale for the executive shuffle at Server and Tools Business isn't too clear. Ballmer has apparently put a renewed focus on hiring product executives with engineering backgrounds, according to a Bloomberg article published on Tuesday. Past critiques of Ballmer have sometimes suggested that he favored business backgrounds over technical expertise for Microsoft's senior executives, contrary to Bill Gates' approach when he served as CEO.

Such talk is rather confusing since no one questions the technical expertise of outgoing president Muglia, as well as Srivastava, a Microsoft Distinguished Engineer. Srivastava is credited with working to produce Microsoft's first cloud-based operating system. He worked with Dave Cutler (a Windows NT visionary) on "project Red Dog," which became Microsoft's Windows Azure cloud platform, according to a Microsoft bio.