The company also announced it will partner with NetApp on the development of some cloud technologies.
Under Tuesday's shakeup, Azure becomes part of Microsoft's newly formed Server & Cloud division, which will be led by senior VP Amitabh Srivastava. The SCD unit will live within the company's Server & Tools business group, and Srivastava will report directly to Muglia.
SCD will also encompass Microsoft's existing Windows Server & Solutions Group, which is under corporate VP Bill Laing. Laing will report to Srivastava. Microsoft also moved its Azure marketing team into the Server & Cloud division.
"This change reflects the alignment of our resources with our strategy, and represents a natural evolution for Microsoft as the Windows Azure business moves from an advanced development project to a mainstream business," said a note published Tuesday on Microsoft's Windows Server blog.
"SCD will deliver solutions that help our customers realize even greater benefits from Microsoft's investments in on-premises and cloud technologies. And the new division will help strengthen an already solid and extensive partner ecosystem," the blog said.
Microsoft is betting big on so-called cloud, or hosted, computing. The company has invested billions developing Azure and opening data centers from which to deliver services. Azure provides cloud based OS, development, and storage services that will offer enterprise customers off-premises computing.
Microsoft also plans to offer cloud systems that business customers can run in their own data centers. In keeping with that, the company on Wednesday announced a three-year partnership with storage and virtualization specialist NetApp.
Under the arrangement, the two companies will collaborate on product development, integration, and marketing of products and services for in-house cloud environments. In particular, the vendors will work to integrate NetApp's storage system with Microsoft's Windows Server 2008 R2 server OS and Hyper-V virtualization technology.
"Through the deeper integration of server, virtualization, management, and storage technologies, Microsoft and NetApp customers can expect datacenter solutions that help them reduce costs, increase performance and reach new levels of efficiency," said Bob Kelly, Microsoft's VP for infrastructure server marketing, in a statement.
Microsoft shares were up slightly in pre-market trading Wednesday.
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