Wed, Feb 09, 2011 - Page 10 News List

Microsoft to fill tech gaps among top management

PLAYING CATCH UP:One analysts said investors are concerned the computer giant is falling behind in key areas, creating a need for more tech-savvy leaders

Bloomberg

Microsoft Corp chief executive officer Steve Ballmer plans to extend a management shake-up aimed at adding senior product executives with an engineering background, two people with knowledge of the decision said.

Changes may be announced this month, said one of the people, who declined to be named because the plans are private.

Last month, Ballmer pushed out server division president and 23-year company veteran Bob Muglia, saying the company needed new leadership that could focus on areas such as cloud software.

The move would expand on an effort to promote managers who have engineering skills and experience executing product plans — a bid to help Microsoft catch up with rivals such as Apple Inc and Google Inc in Web services, smartphones and tablet computers. The overhaul also may quell criticism from the board and investors that Microsoft is falling behind in some markets. Four top executives have left the company since May.

EXECUTING VISION

“You see the engineering team ascending because Steve is realizing that there is a need to execute on a vision and in order to do that you have to actually understand how software is built,” said Wes Miller, an analyst at the Kirkland, Washington-based research firm Directions on Microsoft.

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft, declined to comment.

The CEO wants to rectify Microsoft’s misfires in mobile phones and tablet computers, as well as ensure that the company doesn’t fall behind in cloud software. Cloud technology lets customers store their applications and information in remote data centers and access them over the Internet.

Muglia’s replacement will most likely be an executive who knows how to combine server software with Web-based services, one of the people said. Shuffling the management team also would let Ballmer re-exert his influence amid mounting criticism from investors, the people said. Microsoft’s stock price is little changed over the past year, compared with an 80 percent gain at Apple and 16 percent at Google.

TABLET THREAT

Investors are concerned that the company is falling too far behind in tablet computers and mobile phones, Tony Ursillo, an analyst at Loomis Sayles & Co in Boston, said last month. Those devices could replace some personal-computer purchases, hurting revenue from Microsoft’s Windows operating system, he said.

Ballmer received 100 percent of his target bonus for the past fiscal year, instead of a maximum of 200 percent, because of the failure of a mobile phone called the Kin, the loss of market share in smartphone software and the need for more innovation in that area, the board said in the filing.

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