Latest Microsoft exec exit bad news for firm's talent

The departure of long-time Microsoft executive Bob Muglia is a troubling sign because he was held in high esteem by the firm's technical talent, an analyst said today.

On Monday, Microsoft announced that Muglia, the head of the company's lucrative Server and Tools group, would leave this summer.

Muglia, who joined Microsoft 23 years ago, has been instrumental in growing his group's revenues and leading the company's shift toward cloud computing. In an e-mail obtained by ZDNet blogger Mary Jo Foley, Muglia said he was "moving on to new opportunities outside of Microsoft."

His departure, slated for summer 2011, adds to the line out of the door at the Redmond, Wash. developer, which has lost Ray Ozzie, chief software architect; Stephen Elop, the Office group's president; Robbie Bach, president of Microsoft's entertainment division; and Chris Liddell, the company's chief financial officer, in just over a year.

"What's concerning is that Microsoft's losing long-time insiders who came up the ranks in the company," said Rob Helm, an analyst at Directions on Microsoft, a research company that covers Microsoft exclusively. "What worries me is the loss of these long-term people, people who had the respect of the technical community inside Microsoft. That was especially true of Muglia, and his departure will be a real burden to that part of Microsoft."

In particular, Helms argued that the engineering pockets within the giant firm "felt he was someone who heard them."

Don Dodge, a former Microsoft evangelist who was laid off from the company in 2009, then joined Google, used stronger words to describe the departures of Muglia and others.

"Losing a seasoned exec like Bob Muglia is a big, but recoverable loss," Dodge said on his personal blog Monday. "Losing Muglia, Robbie Bach, Steve Elop, Ray Ozzie, Chris Liddell, Kevin Johnson, Jeff Raikes, and other senior execs is devastating."

Johnson, the former president of Microsoft's platform and services division group, and Raikes, who led the Office division before Elop, left in 2008.

Both Helm and Dodge said that the executive exodus won't hurt Microsoft in the short term, but they wondered about the long-range impact.

"The effects aren't visible yet," said Dodge of the departures. "It takes years to unfold. Each individual business division will get a new leader, and revenues will continue to chug along."

"Microsoft can compensate by bringing in talent from the outside," added Helm, who cited Elop as an example. Elop, who left Jupiter Networks in 2008 to join Microsoft, is now the president and CEO of Finnish phone maker Nokia.

But Helm couldn't come up with names of people who might replace Muglia at Microsoft.

"[His departure] is a critical, but I couldn't point at any one replacement," said Helm. "But there are plenty of other computing companies that work in the same space and headed in to the same direction as Microsoft toward the cloud that have executives who might work out."

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