Microsoft Reorgs Server and Tools Business

The company quietly began a major reorg of its tools and servers organization as it works to hone its focus on developers.

The recent promotion of a veteran, technically-oriented vice president to head up Microsoft's Server and Tools Business (STB) has helped result in the reorganization of the entire unit, the company confirmed.

Microsoft (NASDAQ: MSFT) declined to provide any details of the reorg itself-- though some have leaked out in published reports.

The company appointed Satya Nadella, previously a senior vice president of research and development with the company's Online Services Business, to the job of president of STB, a $15 billion business in its own right, in early February.

Nadella, who has been with the company since 1992, replaced 23-year veteran Bob Muglia.

"I can confirm that Microsoft's Server and Tools business made a series of organizational changes today. Microsoft constantly evaluates its business and makes organizational adjustments to align teams and projects to meet the needs of the business, changes in the industry and to bring additional value to its customers," a Microsoft spokesperson said in an email to, Tuesday.

One of the notable changes in the reorg is the promotion of Scott Guthrie, corporate vice president of the .NET developer program, to head up the company's newly-formed Azure Application Platform team. He will report to Ted Kummert, senior vice president of Microsoft's Business Platform Division (BPD), according to reports by tech blogger Mary Jo Foley's All About Microsoft site, Monday.

In some part, the promotion underlines' Microsoft's determination to be a dominant player in the emerging cloud services business, as Guthrie is highly respected by both technical and marketing groups throughout the company.

Meanwhile, the entire Azure team remains under Bill Laing, corporate vice president of Microsoft's Server and Cloud division, Foley's post said.

The company is also expanding STB's Developer Division, led by Senior Vice President Soma Somasegar, the reports added.

It is not uncommon for Microsoft to have a division-wide reorganization. Indeed, the company has frequently reorganized large parts of its fiefdom over the years, although overall company reorgs have become less common in recent times.

This week's changes may be part of a larger reorganization first rumored back in February, initiated by CEO Steve Ballmer.

Microsoft's STB includes virtually all of the company's developers' tools and development platforms, as well as its diverse server products, including SQL Server, Exchange, SharePoint, and Lync. STB is one of its franchise divisions and has taken well more than a decade to build.

In fact, when Microsoft reported its third fiscal quarter revenues last week -- another record -- STB was credited with helping to drive those sales, while the Windows 7 franchise was not in the top tier of contributors called out by officials in the earnings report.

The move comes at a time when Microsoft is honing its focus on developers along a broad array of fronts, including Windows Phone 7, for instance.

"This [reorganization] enables us to continue to be the champions for the developer audience at Microsoft and work closely with the platform teams to deliver a compelling developer story," the blog said, quoting from an internal email written by Somasegar.

Stuart J. Johnston is a contributing editor at, the news service of, the network for technology professionals. Follow him on Twitter @stuartj1000.

Tags: cloud computing, Microsoft, Azure, Servers & Services, reorganization

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