Bob Muglia Named President of Server and Tools Business

REDMOND, Wash. – Jan. 6, 2009 – Bob Muglia, a 21-year veteran at Microsoft, was named president of Microsoft’s Server and Tools Business (STB). He previously was senior vice president for that business group.

As head of the Server and Tools Business, Muglia, 49, is in charge of delivering on the vision of Dynamic IT, Microsoft’s effort to help IT professionals and developers create optimized and agile infrastructures that align to changing business needs. Muglia’s STB group is responsible for developing and marketing Microsoft’s infrastructure and developer software and services. This integrated set of products provides the foundation for IT operations, security, application development and integration. The Server and Tools Business portfolio includes Microsoft Windows Server, SQL Server, Visual Studio, Virtualization products, System Center management products and the Forefront line of business security products, among others. The Server and Tools Business generates some US$13 billion in annual revenue making it a major driver of Microsoft’s growth and profitability.

Bob Muglia, newly named president of the Server and Tools Business, has helped build a $13 billion business group within Microsoft.

Muglia joined Microsoft in 1988. He has served in a variety of positions, including managing the development of the MSN network and Microsoft Office family of business productivity applications, Windows Server applications, and productivity appliances such as Pocket PCs, eBooks and Tablet PCs.

PressPass spoke with Bob Muglia on Jan. 4.

PressPass: One of the things the promotion speaks to is the importance of the Server and Tools Business to Microsoft. How has that group transformed in recent years, and really started to add a lot to the bottom line for Microsoft?

Muglia: We have a set of great businesses, really, that collectively help to power the engine of our customers in their businesses. Obviously, if you look at Windows Server, SQL Server, our management products, our tools, and now our emerging security products, all of these things are very important for our customers, and have great revenue earning potential for the company. Some of those businesses are multi-billion businesses today, and all of them have very strong potential to grow into billion-plus dollar businesses.

But the thing that I’m honored about is the recognition of the great work that the team has done, and seeing the team continuously work to improve itself and build better and better products. Over the past few years we’ve been able to release products on a very regular cycle, and they have been very positively received by our customers. You know, we work in a marketplace where there’s a lot of opportunity for our software to make a difference in the way businesses run, and the STB team has really been delivering on it.

PressPass: In talking about the Server and Tools business, you’ve obviously learned over your years here how to make a division successful. What do you think are some of the keys to that success?

MUGLIA: Really, as a leader of a division, there are only three things that I do.

One is to help work with the people in the organization to make sure we have the right strategy.

The second is to work with everybody to make sure we have a structure that enables people to execute and operate efficiently and effectively, so every day they walk in and are able to get 100 percent of their job done, and are able to spend their time on productive things.

Then the third thing is picking the right people, and making sure we have the right people in the organization.

PressPass: Are there some things that you are doing in STB that might be cross-fertilized to other parts of Microsoft?

Muglia: Well, sure. I think that there’s a lot of best practices that parts of the teams are doing, there’s a lot of good engineering work that’s being done. One of the areas that we introduced a number of years ago is this concept of workloads, or understanding the different ways in which our customers use our server products. That concept of operating at a more detailed, granular level in terms of understanding where to go is something that I know other parts of the organization have looked at and are in some ways adopting.

I think that one of the things that we try very hard to do in STB is to balance technical excellence and product excellence with a deep understanding of the business. It’s the way we look at things – on the one hand understanding our businesses, and also understanding how our customers use our products. Those two things together are something that I think a lot of organizations have looked at in one way or another.

PressPass: Of course, you’re part of an initiative called “Dynamic IT,” reaching back five years now. Back then, the computing term the “cloud” wasn’t even being used. Has that kind of colored the way you view this process?

Muglia: Five years ago, we talked about a vision for Dynamic IT where organizations would be able to be much more effective across the entire lifecycle of their IT development process. We’ve done an amazing amount, together with our customers and others in the industry, to really make this vision come true. But, there are a lot of things that continue to evolve. We were aware five years ago that services would have some impact on things. We’re still learning exactly how our customers will adopt services. We’ve been very excited to see things like Exchange Online and SharePoint Online and the response that customers have had to these offerings. And then as we’ve announced Windows Azure in the fall, and seen the interest that exists across many, many different organizations and many developers, that’s also been very rewarding.

But it’s still very early days for these things. One of the great joys of being at Microsoft is the fact that the products and services we build are used by our customers to transform their business, to transform their lives. And in so many ways they do that in ways that we can’t even imagine. And that’s one of the reasons I’m still here after 21 years.

PressPass: Is there one thing technologically that stands out in your tenure here as a big change?

Muglia: I think ultimately, of course, it always comes down to the incredible power that is possible with computers. When I joined the company, the capabilities of the machines was much, much less than a thousandth of what it is today. So, the kinds of things we could do with those early computers were so much less than what we do now. I just think about the way computers and the amount of time people spend in front of computers, and the way it’s transformed their lives. I mean, that was just totally different 20 years ago. People worked in front of a computer perhaps, but they sure didn’t go home and do e-mail and browse the Web and watch video on the Web, and listen to music.

PressPass: What are some things you see as good business opportunities for STB moving forward?

Muglia: One trend I think we’ll continue to see is good expansion in our database business. We have a great value that we’re offering to customers relative to competition like Oracle, and a very, very mature product that really can meet the needs of any business application. And with things like the work that’s being done around business intelligence and the way that we’re going to change the game on business intelligence with in-memory technology and making that available to any end user at a small fraction of what people pay today, I think that’s going to be very exciting.

I think another big opportunity is services, and being able to take and use software to do things that today IT has to hire people to do repetitive tasks on. We’ve found — and again Exchange Online, SharePoint Online are a good example of this –that we can offer a great value to our customers, and provide them with those features and products through a service at a small fraction of what they would pay to run it themselves, and at the same time it’s a good business opportunity for us.

PressPass: Speaking about customers and saving money, Microsoft is talking a lot these days about using technology to help out in the current economy. What does STB offer along those lines?

Muglia: SQL Server is an example of that where we’re a fraction of the price of Oracle. Virtualization and the opportunity for customers to lower their administrative costs, and lower the capital costs, and deliver a great set of IT capabilities at again a fraction of the cost – that’s another great example. Or, look at our security business and the fact that we are offering customers a very, very cohesive solution that will cost them a small fraction of what they would pay going to our competitors.

PressPass: What are you hearing from your customers? Do they think it’s going to be a tough 2009?

Muglia: I think everybody is the mode of trying to live one day at a time and understand how things are going to be in the coming weeks and months, and I don’t think anyone really knows yet.

I do think that realistically we have to assume that it’s going to be tough times, and operate under that. It’s appropriate for us to be cautious and operate under that assumption. But nobody really knows at this point.

PressPass: Talk a little bit about how you’ve come through the company, and now you’re going to be a president. Did you ever see that happening?

Muglia: No, I never did. Honestly, again it’s not something that I look at every day and say, ‘Oh gosh, I want to be a president at Microsoft.’ I’ve always viewed that every day what I want to do is work with my team and solve problems for our customers and build great products, and help our field sales force to be effective in selling. That’s what I love doing every day.

I’ve done a lot of different things in the R&D side. I’ve never done games. But other than games, I think I’ve kind of been involved in almost all of our product lines at one point in time or another. I’ve had my ups and I’ve had my downs during that period, and I’ve hung in there.

I always say the most important thing is focus on doing what’s right for our customers, our shareholders and our employees. In the end I’ve always believed that good things come from that.

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