Chief Executive Steve Ballmer has ousted the head of Microsoft's third-largest unit, marking the latest in a series of high-level departures as the software company tries to regain its leadership in the technology sector.
Bob Muglia, a 23-year veteran of the company, ran Microsoft's US$15 billion a year Server and Tools business, which sells server and database software to companies.
An internal memo from Ballmer indicates Muglia was pushed aside in a disagreement over strategy.
"Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth," wrote Ballmer in the memo, which was made public.
"In this context, I have decided that now is the time to put new leadership in place for STB (the server and tools business)."
No replacement has been named. Ballmer said he would look for candidates inside and outside the company.
"It sounds like he was asked to leave," said Sid Parakh, analyst at McAdams Wright Ragen. "It seems like there was disagreement over strategy."
Microsoft's server and tools business, smaller than only its flagship Windows and Office units, has been growing steadily over the past few years, and is leading the company's push into "cloud computing," or selling access to storage and computing power online.
Microsoft has long been considered a buyer in the server and database sector, but analysts said it was hard to see an obvious target.
(Reporting by Bill Rigby; Editing by Gunna Dickson and Richard Chang)