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The Brain Drain in Redmond Continues

The brain drain in Redmond continues.

Microsoft (NASDAQ: MSFT  ) has lost a plethora of high-level executives over the last couple of years, including household names like chief software architect Ray Ozzie, Xbox marketing genius Robin Burrowes, and server software boss Bob Muglia. Some of the departures seem pleasant enough, while others were visibly forced out the door. Their new destinations range from brand-new start-ups or traditional publishers to more obvious competitors Apple and Juniper Networks (NYSE: JNPR  ) .

Senior VP Steven Sinofsky is the latest Microsoft exile. He's credited with the general success of Microsoft's Office suite as well as the Windows 7 overhaul that made us forget the disastrous Windows Vista release. Sinofsky has also been a prime candidate to take over when current CEO Steve Ballmer steps down in 2017 or so. Ballmer thanked Sinofsky for his "many years of work" and Sinofsky said it was a "personal and private choice."

But investors smell something fishy, and Microsoft shares are down more than 3% on an otherwise bland market day.

AllThingsD's anonymous sources say that there's been friction between Sinofsky and other high-level company leaders lately. Business Insiderchannels another inside source, saying that Sinofsky left because Ballmer wouldn't anoint him the crown prince of Microsoft's succession options.

Or maybe Sinofsky's ideas just weren't welcome anymore. Burrowes left the Xbox team to run Apple's European app store, following the market shift from gaming consoles to casual smartphone and tablet gaming; Bob Muglia advocates open-source software solutions at Juniper. Implementing those ideas inside Microsoft would be tantamount to treason.

Sinofsky hasn't revealed his next step yet, but when he does, I expect Steve Ballmer to throw a few chairs around his deluxe corner office.

It's been obvious for some time that the executive change that would help Redmond the most would be Ballmer's own exit. All the best ideas, like Muglia's open-source commitment, are leaving Redmond to fester in its antiquated business plan.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our chief tech analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

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10/21/2016 4:00 PM
MSFT $59.66 Up +2.41 +4.21%
Microsoft CAPS Rating: ****