Microsoft's Elop, Penn Departing In Latest Executive Leadership Reshuffling

Microsoft on Wednesday revealed a management reorganization in which some longtime senior executives will be departing, while others will be getting larger roles within the company.

The list of departing executives: Stephen Elop, executive vice president of Microsoft's Devices group; Kirill Tatarinov, head of Microsoft's Business Solutions Group; Eric Rudder, chief of advanced strategy; and Mark Penn, a former political adviser to former President Bill Clinton who held the role of chief insights officer.

The changes in organization and leadership, detailed by CEO Satya Nadella in an email to employees posted on the company website, are effective immediately, and the departing executives are leaving after a transition period (with the exception of Penn, who is leaving in September for another role).

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While Microsoft partners told CRN they're not surprised by the departure of Elop, the former CEO of Nokia, the fact that Rudder is leaving after 25 years at Microsoft was unexpected.

One Microsoft partner described Rudder as "an extremely smart technologist" who was like a "right-hand man" to Chairman Bill Gates. "When Rudder and Gates were in a room together, they could invent something new just by brainstorming together," said the partner, who didn't want to be named.

Microsoft, Redmond, Wash., is also moving the development teams behind its Dynamics business, which includes CRM and ERP products, to its Cloud and Enterprise group, Nadella said in the email to employees.

Microsoft Chief Operating Officer Kevin Turner, who oversees the software giant's channel, will also take over responsibility for the Dynamics business sales and partner organization.

While Dynamics partners will still operate autonomously from the rest of the channel, Microsoft partners told CRN they're pleased to see Dynamics moving into Microsoft's cloud division.

"Microsoft has been preaching the mobile-first, cloud-first message, and this is evidence that it's really serious about it," Jeff Chandler, president of Fairfax, Va.-based Microsoft partner American Technology Services, told CRN. "Partners have been embracing Sharepoint and OneDrive, so the next big wave will be integrating apps like Dynamics into a full-feature cloud offering."

Robby Hill, founder and CEO of HillSouth, a Florence, S.C.-based Microsoft partner, said partners will benefit from the move of the Dynamics business into the Cloud and Enterprise business.

"Microsoft has always run Dynamics as a separate division even with its cloud offerings," Hill said. "Based on this leadership shakeup, the expertise will be embedded across the whole product line."

"In the past, the Dynamics organization has almost existed as a second organization at Microsoft -- not fully integrated with the rest of the Microsoft field," said Chris Hertz, CEO of New Signature, a Washington, D.C.-based Microsoft partner. "If this means tighter integration between the Dynamics field and the broader Microsoft field, then I think this will be a positive outcome."

Microsoft is also strengthening its Cloud and Enterprise team, led by Executive Vice President Scott Guthrie, by focusing on building high-value infrastructures and business services, especially with data and analytics, security and management, and development tools, according to the company.

Microsoft's Cloud and Enterprise engineering efforts will now involve Dynamics solutions, such as enterprise resource planning (ERP) and customer relationship management (CRM), Nadella said in the email.

"This makes complete sense. … For a long time, these big enterprise apps were on their own island, and now they have to be more connected," said Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Microsoft partner. "I'm sure we'll see some great cloud offerings once this develops."

In addition to strengthening its Cloud and Enterprise Group, Microsoft is also forming a new team, Windows and Devices Group, which combines Microsoft's operating systems group and devices group to more closely align hardware and software, said Nadella in the email.

Nadella said Executive Vice President Terry Myerson will lead this group, which bolsters its hardware devices, such as Surface, Lumia and HoloLens, as agents for its popular Windows operating system.

’We are aligning our engineering efforts and capabilities to deliver on our strategy and, in particular, our three core ambitions,’ said Nadella in the email. ’This change will enable us to deliver better products and services that our customers love at a more rapid pace.’

KEVIN McLAUGHLIN contributed to this story.

PUBLISHED JUNE 17, 2015