"The best time to think about change is when you are in a position of strength, and that’s where we are today with STB – leading the server business, successful with our developer tools, and poised to lead the rapidly emerging cloud future. Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth. In this context, I have decided that now is the time to put new leadership in place for STB. This is simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles. Bob has been a phenomenal partner throughout this process, and he and his leadership team have the right strategy in place.
"In conjunction with this leadership change, Bob has decided to leave Microsoft this summer. He will continue to actively run STB as I conduct an internal and external search for the new leader. Bob will onboard the new leader and will also complete additional projects for me.
"Bob has been a founder and leader of our server business from its earliest inception. He has led our Developer, Office, and Mobile Devices Divisions, and key parts of Windows NT and our Online Services business. I’ve worked with him in many capacities over the years and I’ve always appreciated his customer focus, technical depth, people leadership skills, and his positive energy. I want to thank Bob for his hard work, many accomplishments, and his focus on putting Microsoft first for 23 years."
Microsoft is conducting an internal and external search for Muglia's replacement and hopes to have something to announce "sooner rather than later," I hear.
Ballmer appointed Muglia one of four Microsoft presidents in January of 2009. (The other remaining Presidents are Steven Sinofsky, head of Windows and Windows Live; Qi Lu, head of Microsoft's Online Services division; Andy Lees, head of the Mobile Communications Business; Kurt DelBene, head of the Business Division; and Don Matrick, head of the Interactive Entertainment Business.)
Update: As others have noted, it does make it sound as though Muglia was unhappy with some pending Ballmer changes to the STB business and opted to leave. I don't agree with some comments I've seen claiming Muglia wasn't "on board" with Microsoft's increasing emphasis on the cloud. Muglia's been championing private and public cloud products and services from the company, and has done a lot to guide Microsoft's "All In" transition, from my vantage point.
Microsoft combined its cloud and server teams in December 2009, with Muglia continuing to head the STB. As part of that reorg, Microsoft’s Windows Azure chief Amitabh Srivastava began reporting directly to Muglia. Srivastava runs the unit that combines Windows Server and Windows Azure (codenamed RedDog) into the newly minted Server & Cloud Division.
I'm betting Srivastava becomes the new STB chief. Other guesses?