Analysis of Microsoft Corporate VP Shuffle@Exchange and Windows Mobile

Last month, Microsoft shuffled around leadership in the Exchange and Windows Mobile teams. Part of this was undoubtedly just to keep things varied for the execs and product groups, but is there another reason?

We think Corporate Vice President Terry Myerson's move to Windows Mobile is intended to bring his wealth of Exchange background--not to mention his success in driving Exchange to the leadership position among competitors--to bear on Microsoft's strategy to compete with Research in Motion (RIM). BlackBerry continues to be dominant among key corporate decision makers, even though Windows Mobile market share has surpassed that of RIM in the past year. Our guess is that dealing a strong blow to BlackBerry will be one of Myerson's objectives.

And we believe the expansion of Rajesh Jha's portfolio from Office Live to include Exchange is intended to bring his proven track record with Software + Services to bear on the next version of Exchange--code named Exchange "14." With Microsoft betting its future on Cloud Services (as further evidenced with the PDC announcement of Windows Azure), its success with Exchange Online--which in the future will sit on an Exchange "14" back end--is paramount. Convince customers to treat messaging as a commodity and hand it off to Microsoft, and you have a powerful position from which to build out further Online offerings and tap into that holy grail of annuity revenues software as a utility.

Overcoming customers' addictions to their BlackBerries and getting customers to trust Microsoft Online with their email data are no small feats. Yet these are key pillars in Microsoft's bid to build a moat around its massive Exchange revenue stream, and continue to build on the success of Microsoft Exchange in years to come.

... David Sengupta

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