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November 20, 2005

Microsoft seeks new leader for MBS unit

Microsoft Corp is looking for a replacement to lead its Microsoft Business Solutions division, as its current senior vice president Doug Burgum moves into the newly created position of chairman.

By CBR Staff Writer

Burgum joined MBS five years ago when Microsoft acquired Great Plains Software, where he was president. He led the division in its efforts to carve a position in the business applications market and unify its acquired products with its home grown software under the Project Green initiative, now rebranded as Microsoft Dynamics.

As chairman his role will include building thought leadership of Microsoft’s business software and software-based services with business decision makers broadly and working more with industry influencers, MBS prospects, customers, partners and ISVs throughout the world, including in markets where we have a limited presence today, he said in a statement.

We have much work to do to evangelize the Microsoft vision for the value of role-based software design, software-based services for businesses, a world going ‘vertical’ and the incredible power that is possible when solutions are developed that marry the two currently disparate software worlds of business processes (structured data) and personal productivity (unstructured data), he said.

With the launch of the Dynamics brand marking the start of a major release cycle, he said it was the right time to make a move and by beginning the search now believes that a new leader can be in place in time to own the planning process for fiscal 2007.

He will continue to lead the business until a replacement is found and during the transition, and will retain full accountability for delivering on the division’s FY06 commitments and FY06 financial results.

Despite talking up the numbers which include 16% overall growth in the year to date period, an 18% increase in software revenue, and 21% growth in license revenue, the unit continues to lose money.

In the most recent quarter, MBS had an operating loss of $12m on revenue of $181m. In the comparable year ago period it reported a loss of $31m on revenue of $156m.

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Microsoft has struggled to establish itself in the business applications market because although sales and development of the Great Plains, Navision, Solomon and Axapta products have continued, the business’s CRM development efforts have floundered culminating in the decision to skip a complete version. Its grand Project Green plan to build a new generation of applications based on a single code base also stuttered and changed direction.

Microsoft Corp as a whole is also in the midst of major transition following its belated recognition of the importance of the software as a service model. An internal memo leaked earlier this month indicated the depth of change the company is planning to undergo in an effort to catch up with the market.

In September Microsoft restructured its seven divisions into three. The Information Worker division, which sells the Office suite and some collaboration server software, was combined with Microsoft Business Solutions to form the Business Division, led by president Jeff Raikes to whom Burgum reported. Prior to the divisional reshuffle, as SVP of MBS, Burgum had reported directly to chief executive Steve Ballmer. In his role as chairman he will continue to report to Raikes.

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