Microsoft President of 15,000-person Digital Transformation Group, James Phillips, is out

As part of a big reorg inside Microsoft's enterprise side of the house, Nuance also is starting to get integrated into the Cloud + AI business.
Written by Mary Jo Foley, Senior Contributing Editor

Ten-year Microsoft veteran and head of its 15,000-person Digital Transformation Group, James Phillips, is leaving the company effective April 15. Microsoft Executive Vice President Scott Guthrie announced Phillips' departure -- for an unspecified "external opportunity" -- via email today, April 4. Phillips' departure, after an extended sabbatical, is just one of several moves happening in Microsoft's Cloud + AI division.

Phillips was appointed to lead the new Digital Transformation Group in March 2021. That group included Dynamics 365, Power Platform, Azure AI Platform, Azure Data Platform, Azure IoT Platform, and the growing family of Microsoft Cloud for Industry solutions.  In January this year, Phillips joined the Seattle-based Madrona Venture Group as a Strategic Director in addition to his existing role as President of the Digital Transformation Platform Group.

Phillips joined Microsoft in 2012 as a strategic advisor to Satya Nadella, who was then president of Microsoft's Cloud and Enterprise Division. He joined Microsoft from NoSQL database vendor Couchbase, where he was a co-founder and CEO. 

I'm not hearing that Microsoft plans to replace Phillips. I've asked the company for comment. Instead, it seems like Phillips' direct reports and group are being divided up and moved around.  

Update (April 4): Phillips wrote briefly about his decision to leave Microsoft on LinkedIn and noted he would share more about his next gig in a couple of weeks.

Guthrie announced that Charles Lamanna will continue to lead the Business Applications & Platform (BAP) organization and join his C+AI leadership team, reporting directly to Guthrie. Eric Boyd will continue to lead the AI platform organization and join the C+AI leadership team, reporting directly to Guthrie. Rohan Kumar will continue to lead the Azure Data organization, join the C+AI leadership team and report directly to Guthrie. 

Guthrie also announced more details today how Microsoft plans to integrate conversational AI vendor Nuance Communications into his division. Last month, Microsoft completed its acquisition of Nuance for $19.7 billion. At that time, Microsoft said Nuance CEO Mark Benjamin would report directly to Guthrie.

Microsoft is moving the Microsoft Health & Life Sciences engineering team to the Nuance R&D organization under Benjamin in order to consolidate its first-party healthcare products across Microsoft and Nuance. Nuance Enterprise business and product management are moving to Lamanna's Business Applications and Platform organization -- which aligns with some of the joint contact-center work the two organizations already announced.

(It's interesting that Microsoft is doing more of the traditional integration thing with Nuance, unlike it did with LinkedIn and GitHub. Microsoft has opted to let those latter two companies to run more as standalone units, rather than bringing their people and teams into the existing Microsoft organization.)

Guthrie also announced the consolidation of the IoT and Edge engineering teams "to ensure we have deeper synergies in IoT and the work we're doing across Azure Arc, Azure Stack, and Azure Edge Zones," as part of today's reorg.

All of the changes announced today are effective immediately.

Update (April 18): Phillips is going to Stripe, where he will be President of Financial Services.

Update (May 13): Nope. Phillips is not going to Stripe after all. From his LinkedIn:

"Today I made a painful decision to forego joining Stripe running their financial services business. Though I remain exceedingly bullish on the company and its prospects, I've concluded it's just not the right move for me and my family at this point in time. Stripe is an incredible company and I know they will continue to thrive!"

No word (yet) on what Phillips is planning to do next.

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