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Microsoft's Got A New Go-To Guy For Server Software And Justice Relief

Senior VP Bob Muglia is expected to rev up the vendor's server software business and make quick work of final Justice Department requirements.
Part of Muglia's job will be to make sure the applications moving to Microsoft's server stack are large and complex enough that customers choose premium versions of its software. According to Microsoft, SQL Server holds just over a 40% share of the database market measured by units, but its share of the database market's revenue is about half that. That's starting to change, though, Muglia says. Customers are "beginning to move apps they're willing to spend lots of money for to SQL," he says. "We're able to bring our revenue per unit up." About one fifth of SQL Server sales are of Microsoft's most expensive enterprise edition, which has a list price of $25,000 per processor, Muglia says.

At the other end of the market, Microsoft is distributing more free versions of SQL Server on its Web site, trying to build a bulwark against Linux and open source databases like MySQL in hopes that hobbyists or small businesses will download the free version, then upgrade later.

Conciliator

Stylistically, Muglia is a sharp departure from his predecessor as head of the server group, senior VP Eric Rudder, known for his technical brilliance and combative management style. Last fall, Rudder took a new job working for Microsoft chairman Bill Gates on advanced technologies and technical strategy, his second tour of duty as a special assistant to Gates.

While Microsoft's servers and tools business grew under Rudder, he also gained a reputation for a confrontational style and disdain for talking to the press. Muglia, who's worked on most of Microsoft's major businesses, including Windows, Office, MSN, and .Net Web-services technologies, is seen as a manager who can break down barriers between technical and business staff in the 7,000-person servers and tools unit. "Bob respects and values what marketing and business does," says Steve Guggenheimer, a general manager in the group. It's a useful skill at a time when Microsoft is trying to make a clearer connection between its products and IT problems.

Months, Not years

Path To A New Deal
May 1998
Justice Department and 20 states slap Microsoft with antitrust suit in federal court
June 2000
Judge orders Microsoft broken into two operating companies and places other limits on company but stays remedies during appeals
June 2001
Appeals court reverses breakup order and sends case back to new federal court judge
November 2002
New judge approves settlement
May 2006
Microsoft and Justice agree to extend Justice oversight of company while it rewrites technical document
Muglia's conciliatory skills will be put to the test in his new role as manager of 300 Microsoft staffers working to meet Justice Department requirements that Microsoft rewrite a complex technical document that describes how other companies' software can better interface with Windows. The document was required by Microsoft's 2002 settlement of its landmark antitrust case with the federal government; earlier this month, Microsoft and Justice announced an agreement under which the department would extend its oversight of the company by two more years, until November 2009, because of Microsoft's failure to produce a workable document.

According to a filing by Microsoft and Justice to the U.S. district court in Washington, D.C., Microsoft has been unable to translate recommendations of a three-person technical committee into workable documentation of the protocols that would let other companies' software communicate with Windows. The Justice Department said Microsoft was late producing a document and that many of its proposed fixes didn't resolve known problems. To break the impasse, Microsoft named Muglia to rewrite the documentation and test its proposals, according to a court filing.

Protocols that had been in place for years didn't include documentation suitable for use outside the company, according to Muglia. "We really didn't have the right engineers on it," he says.

Muglia says he's given the court an estimate of "months, not years," to complete the document, and hopes to have an agreement with the Justice Department on a specification within the next couple of weeks. He's also working on a common document for the United States and European Union, where Microsoft has run afoul of regulators for failing to clearly publish the Windows Server interfaces required by an antitrust judgment there.