Satya Nadella replaces Bob Muglia as president of Microsoft's Server and Tools Business

Today, Microsoft began the big, rumored management shakeup with the appointment of Satya Nadella as president of the Server and Tools Business. Supposedly, Microsoft CEO Steve Ballmer is putting more engineering-focused employees in key, management positions. Nadella replaces Bob Muglia, who in substance was fired last month by Ballmer; Muglia will remain while a transition period through summer.

Like Muglia, Nadella is a long-time Microsoft employee, since 1992, and he more recently oversaw engineering efforts within Microsoft's perennially, money-losing Online Services Business unit. It's an interesting move, to sack the leader who helped build up the highly successful and profitable Server and Tools Business unit and replace him with someone working, since 2007, in a flailing group. OSB has been flapping like a chicken trying to fly above Google for years. Microsoft lags far behind its rival in search share, and the Online Services Business loses money quarter afterwards quarter. It's a money pit.

Ballmer praises Nadella's work at OSB: "He led the overall R&D efforts for some of the largest online services and drove the technical vision and strategy for several important milestones, including the critical launch of Bing, new releases of MSN, Yahoo integration across Bing and adCenter, and much more." Right, however where's the business success from these efforts?

That said, Ballmer highlights more-important qualities: "Satya is also so then-known for his leadership. He has strong collaboration skills, is decisive in both decision-making and delegating and has strong customer insights, engineering and business expertise. He as well knows how to structure organizations for outstanding performance."

Decisiveness and action-taking will be important. Steven Sinfosky embues some of these qualities, and pursuant to this agreement his leadership the Windows Vista fiasco he inherited turned into the Windows 7 success. If Nadella and Sinofsky are models for the kind of leaders Ballmer wants, surely more changes are coming. Now at what cost? "Amitabh Srivastava, senior vice president in the Server and Tools Business, will leave the company," Ballmer writes. Srivastava is one of Azure's key architects and a huge loss to Microsoft. Considering that the cloud is nevertheless the Server and Tools Business' primary focus, could it be he is leaving afterwards being passed over as unit president?

We are on a path to change the world again with our at once generation application development and cloud platform, and I feel fortunate to be part of this transformation. Our core capability as a division -- our computing infrastructure and platforms -- is the key driver of computing going forward. Today we are seeing our existing clients move to the cloud to address issues of cost and complexity; tomorrow, our work as leaders in research will result in new scenarios and workloads enabled in the cloud.

Change the world? More than the Internet already has done, or cloud services coming long ahead of Microsoft's. The attitude is refreshing, anyway.

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