Microsoft Loses Reller and Bates, Gets New Strategy Chief

Two senior Microsoft executives, Tami Reller and Tony Bates, are leaving the company as CEO Satya Nadella reshapes his leadership team.

Reller, who was the executive vice president of Microsoft's marketing group, will apparently stay for a transition period, while Bates, executive vice president of business development and the onetime Skype CEO, will leave immediately, reported Re/code's Kara Swisher on Sunday, citing unnamed sources close to the company. Microsoft on Monday published an internal e-mail from Nadella confirming the executive moves.

Eric Rudder, the head of Microsoft's Advanced Strategy unit, will temporarily take over Bates' responsibilities. Chief Marketing Officer Chris Capossela will take over Reller's role.

In addition, Nadella has named Mark Penn, current Microsoft marketing executive and former aide to Bill and Hillary Clinton, as the company's new chief strategy officer.

Outgoing Microsoft executives Tony Bates and Tami Reller.

Nadella reportedly informed insiders of the changes on Friday. Swisher speculates the move will give Penn a good look at new product areas and areas where Microsoft can invest in new technologies. However, the move takes Microsoft's huge advertising budget out of Penn's hands and shifts it to Capossela.

Penn was widely responsible for Microsoft's overall messaging, which, as The New York Times' Nick Wingfield noted, has been controversial -- notably the "Scroogled" campaign which raised questions about Google's approach to privacy. While some believed it was lowbrow advertising, Penn loyalists claimed to have data showing it was effective, Wingfield reported.

As the longtime strategist for the campaigns of both Clintons, Penn is no stranger to controversy. He had to step down as Hillary Clinton's chief strategist during her 2008 presidential campaign after he lobbied a free-trade pact with Columbia on behalf of public relations firm Burson-Marsteller, which then-Sen. Clinton opposed. Penn was also CEO of Burson-Marsteller at the time. It appears unlikely that Clinton will bring him back if she runs for president in 2016; it would certainly be an issue if Nadella is grooming Penn for a strategic role at Microsoft.

"I am looking forward to applying Mark's unique skill set across a broader set of challenges facing the company, from new product ideas to helping shape the overall areas of strategic investment," Nadella wrote in the internal e-mail. Penn will continue to report to Nadella.

Nadella began reshuffling his leadership team last week, when Julie Larson-Green was named chief experience officer of the "My Life and Work" team. She will be reporting to Qi Lu, executive vice president of Applications and Services Engineering. Larson-Green's move makes room for former Nokia CEO Stephen Elop to head the Devices and Studios Group upon the completion of Microsoft's $7.2 billion acquisition of the company's handset unit.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.