Azure Reorganization Raises Questions About the Future of Ray Ozzie at Microsoft

Last week, we reported that Microsoft is moving Windows Azure, its cloud computing platform, into a new business unit called the Server and Cloud Division, as the company gears up to offer a paid cloud service early next year. Azure now falls under the authority of Bob Muglia, president of the company’s Server and Tools Business. By Friday, though, I was hearing deeper rumblings around town about this reorganization: namely, whether it signifies the end of Ray Ozzie at Microsoft.

Here’s why people are talking. Ozzie, Microsoft’s chief software architect, has been the public face of Azure (and its main driving force) for the past year or so. Moving the development team to a product group in Muglia’s domain makes some observers think Ozzie has lost influence over the cloud platform, which has been a big part of his mission at the company. One former Microsoft executive told me that this re-org comes on the heels of Ozzie losing a power struggle over Windows Live to Steven Sinofsky, president of the Windows Division, earlier this year. And multiple sources say Ozzie continues to commute between the Seattle and Boston areas.

“People keep waiting. ‘When is Ray going to have impact?’ Unless you’re here full-time and have Bill and Steve’s ear, it’s tough to be successful,” the former Microsoft exec said, referring to Bill Gates and Steve Ballmer. This source went on to say that Ozzie’s “power and influence is gone. At Microsoft, it all comes down to power politics…If you don’t have product groups working for you, what power do you have?”

Ozzie joined Microsoft in 2005 when his company, Beverly, MA-based Groove Networks, was acquired for a rumored price of around $200 million. (One person in the know told me that Bill Gates “overpaid” just to get Ozzie on board.) He was thought to be Gates’s successor. When Microsoft acquired Groove, Gates was quoted as saying, on a conference call, “I thought about ‘Could we ever hire Ray and his team?’ for a long, long time. So it’s a big, big day for me that this is finally taking place.”

Let’s be clear about one thing: Ozzie is a software developer’s God. He worked on VisiCalc (the first spreadsheet) and helped create Lotus Notes and Groove Virtual Office (collaborative software), among many other technologies. He is widely respected in the computing world, and nobody I’ve talked to is questioning his skills or smarts.

But some, including Mark Anderson from Strategic News Service, are saying (or implying) that the aggressive and argumentative culture of Microsoft executive life has been a poor fit for Ozzie’s talents, and that he might leave. This seems plausible, given what I know about the dog-eat-dog nature of Microsoft VP turf wars, and how they often turn out.

A Microsoft spokesperson did not reply to my request for information last week about Ozzie’s broader role at the company and his direct reports. But a PR firm did respond to a Redmond Channel Partner blog post which raised some similar questions about the Azure re-org. Here’s what the PR firm said, on behalf of Microsoft:

“In short, as chief software architect at Microsoft, Ray is responsible for oversight of the company’s technical strategy and product architecture. Ray’s role isn’t affected by this change. Ray will continue to be very involved with Windows Azure; however, as Microsoft prepares to begin billing customers for the service in February, it makes sense that Windows Azure would move from an advanced development project under Ray’s oversight into a mainstream business in a product group at the company (with full marketing, sales, etc., support).”

Whether or not this is the full story—and we have no indication from Microsoft that it isn’t—it seems unlikely that Ozzie will leave the company anytime soon. It’s still fairly early in his tenure. Perhaps he will continue to oversee the deployment of Azure at a different level. Or perhaps he will transition to another role that Microsoft isn’t talking about yet.

Just last May, Ozzie spoke at a Technology Alliance luncheon about his mission at Microsoft. “Craig [Mundie] and I have interesting roles in that we took on most of what Bill did. Everything I do is through influence and partnerships. I am more inwardly focused, and I work with the product teams,” Ozzie said. “I’m trying to drive alignment and synergy based on what will happen in this product cycle and the next one.”

Trending on Xconomy

By posting a comment, you agree to our terms and conditions.

5 responses to “Azure Reorganization Raises Questions About the Future of Ray Ozzie at Microsoft”

  1. tom summit says:

    I didn’t realize Ray Ozzie helped on Visicalc?

    Are you sure?

  2. As I understand it, Ray worked at Software Arts on VisiCalc and TK Solver. I don’t know the specifics of his contributions though.

  3. Ray was not involved in the original work on VisiCalc, but he did work for us at Software Arts after that building the underlying runtime engine for our later products, including TK!Solver and VisiCalc Advanced Version. He was an extremely valued member of our technical team. He left to go to Lotus and bring about his vision that became Notes. He is indeed one of the titans of software development.

  4. Bing says:

    Thanks Dan for the clarification! I searched Wiki and your Web site but didn’t find anything that can back it up, until now, that is.