Muglia talking up the Windows Azure platform to attendees of Microsoft&39's PDC conference in 2010.

Microsoft today announced that Bob Muglia, the president of its server and tools business, is stepping down and will be leaving the company sometime this summer.

In a memo to Microsoft employees, CEO Steve Ballmer said that Muglia will stick around for the transition as Ballmer does "an internal and external search for the new leader," and that Muglia would "complete additional projects for me."

The company would not comment on what Muglia plans to do next.

Muglia joined Microsoft in 1988. Before heading up the company's server and tools business, he was its senior vice president and had leadership roles in Microsoft's Office, mobile, and developer units. Muglia also sat on Microsoft's Business Leadership and Technical Senior Leadership Teams, both of which play a part in shaping the company's ongoing software and marketplace strategies.

During his tenure in the server group, Muglia helped the company launch and hone the direction of its Azure platform, which lets developers write applications that run on Microsoft's hardware. Muglia's team's most recent effort has been the next major version of Windows Home Server, as well as Windows Small Business Server, the latter of which was released to manufacturing last month.

Muglia bounced back from a demotion following Microsoft's late-'90s foray into e-commerce, called Hailstorm. As part of the rise of the server and tools business, which has become an increasingly larger part of Microsoft's revenues, Muglia was promoted to president in early 2009.

Muglia's departure is just the latest in a long string of executives who have left the company in just the past year. During 2010, Microsoft Chief Software Architect Ray Ozzie bid adieu, as did Business Division President Stephen Elop, who left the company to become the CEO of Nokia. Entertainment and Devices Unit President Robbie Bach and Chief Technology Officer J. Allard also left the company back in May of last year.

The full copy of Ballmer's memo can be found below:

From: Steve Ballmer Sent: Monday, January 10, 2011 To: Microsoft - All Employees Subject: STB - Building on Success, Moving Forward

There are very few $15B businesses in the software industry, and Microsoft is the only company that has built three of them. While Windows and Office are household words, our Server and Tools Business has quietly and steadily grown to be the unquestioned leader in server computing. We have driven the industry forward and established the foundation for an entire generation of business applications. We have overcome significant competitive challenges. Over the past twenty years, the outstanding leadership from everyone involved in STB has made it a $15B business today.

We are now ready to build on our success and move forward into the era of cloud computing. Once again, Microsoft and our STB team are defining the future of business computing. In October, we completed an incredibly successful PDC where we detailed the future of the cloud, outlining Platform as a Service and demonstrating the rapid advancement of Windows Azure.

The best time to think about change is when you are in a position of strength, and that's where we are today with STB - leading the server business, successful with our developer tools, and poised to lead the rapidly emerging cloud future. Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth. In this context, I have decided that now is the time to put new leadership in place for STB. This is simply recognition that all businesses go through cycles and need new and different talent to manage through those cycles. Bob has been a phenomenal partner throughout this process, and he and his leadership team have the right strategy in place.

In conjunction with this leadership change, Bob has decided to leave Microsoft this summer. He will continue to actively run STB as I conduct an internal and external search for the new leader. Bob will onboard the new leader and will also complete additional projects for me.

Bob has been a founder and leader of our server business from its earliest inception. He has led our Developer, Office, and Mobile Devices Divisions, and key parts of Windows NT and our Online Services business. I've worked with him in many capacities over the years and I've always appreciated his customer focus, technical depth, people leadership skills, and his positive energy. I want to thank Bob for his hard work, many accomplishments, and his focus on putting Microsoft first for 23 years.

We enter this new decade with STB providing the platform for today's business solutions, and uniquely well-positioned to drive the future of cloud computing. I believe STB will continue to lead the industry with outstanding products and services for our customers and exceptional results for our business.

Thanks, Steve

Update at 2:45 p.m.: Mary Jo Foley has included the text of Bob Muglia's departure e-mail here.

Previously: Microsoft's server boss talks Azure and more (Q&A)