Johnson leaves Microsoft for Juniper

Juniper Networks confirmed Thursday that Microsoft’s Kevin Johnson will become its new CEO in September, taking over for current Chairman and CEO Scott Kriens.

Kriens will remain chairman of Juniper and play an active role in directing the strategy of the company, Juniper said in a statement. Johnson also will become a member of Juniper’s board of directors when he joins the company.

On Wednesday, Microsoft said Johnson, president of its Platforms and Services division, would be departing the company, but did not say where he was going. The Wall Street Journal reported Thursday that Johnson was departing for Juniper.

Microsoft plans to divide its Platforms and Services division, the group Johnson led, into the Windows/Windows Live group and an Online Services group. Both organizations will report directly to CEO Steve Ballmer.

Senior vice-presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will lead the Windows group, reporting directly to Ballmer. Microsoft plans to create a new position to run the Online Services group and will look internally and externally to fill that job, the company said. Satya Nadella will continue to run search, MSN and ad platform engineering efforts, and Brian McAndrews will continue to lead the Advertiser and Publisher Solutions group within the Online Services group.

Johnson has been with Microsoft since 1992. “In some ways, he has had a career trajectory somewhat like Steve Ballmer’s own. He was definitely on the short list of people who would be a potential CEO replacement,” said Rob Helm, an analyst with Directions on Microsoft.

Yet, he was in a difficult position as head of the online group. “In the end he was responsible for the online strategy, which is by far the weakest part of Microsoft’s business,” Helm said. Johnson hasn’t managed to improve market share or revenue shortfalls through organic growth or acquisition, Helm noted. “And spending on that business has been tremendous enough to weigh on the company’s results. I don’t know if he jumped or was pushed, but there’s no question he had a difficult job and he may not be the last manager to fall on this particular sword.”

Microsoft’s online services business reported a US$488 million loss in operating income for its fourth quarter, more than double the $210 million operating loss the division saw last year.

In addition, Johnson was a driving force behind Microsoft’s unsuccessful attempt to acquire all or part of search rival Yahoo.

However, he was also in charge of the Windows operation at Microsoft, one of the company’s most profitable products.

His departure is a blow for Microsoft, said Greg Sterling, an analyst with Sterling Market Intelligence. “This is a bit of a surprise,” he said. “He was a very strong and central figure in the company.” Sterling speculated that Johnson may have been frustrated by his company’s failure to close the Yahoo deal.

In a statement, Kriens said he was proud of the work he’s accomplished in his 12 years at Juniper and called Johnson a “world-class executive” with whom he looks forward to working to shape the company’s future.

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