Ray Ozzie Resignation Signals Microsoft Brain Drain

Uh-oh.

Microsoft Chief Software Architect Ray Ozzie is leaving the company. The reason? Unknown at this time.

“With our progress in services and the cloud now full speed ahead in all aspects of our business, Ray and I are announcing today Ray’s intention to step down from his role as chief software architect,” Microsoft CEO Steve Ballmer wrote in a companywide email on 18 October. “He will remain with the company as he transitions the teams and ongoing strategic projects within his organisation.”

According to Ballmer, “The CSA [Chief Software Architect] role was unique and I won’t refill the role after Ray’s departure.” (Ozzie’s predecessor as CSA was Bill Gates. Just to, you know, give you an idea of the huge shoes that any successor would have needed to fill.)

Watch out Microsoft

Ozzie’s departure is a potentially troublesome development for Microsoft, for two reasons.

First, it’s indicative of an executive “brain drain” within the company. In September, Business Division president Stephen Elop stepped down to take the CEO reins at Nokia. And earlier in the year, a shakeup in the Entertainment & Devices Division saw the departure of that unit’s president, Robbie Bach, along with J Allard, its senior vice president of design and development.

A handful of more midlevel executives have also departed in recent months. But Ozzie’s departure is maybe the highest-profile exit yet, and that it comes without a clearly defined reason (medical, or whatever) has already sparked chatter about what’s going on in Redmond’s executive boardrooms.

Second, Ozzie seemed to be one of Microsoft’s chief proponents not only of the cloud, but also the company retooling itself as a supple, reactive entity in the era of Google and Microsoft. In October 2009, he announced the creation of FUSE Labs, a unit focused on software related to social connectivity, real-time experiences and rich media.

Strategic thinking

In an 8 October internal memo so-conveniently leaked to several news outlets, Ozzie wrote that FUSE Labs would bring “more coherence and capability to those advanced development projects where they’re already actively collaborating with product groups to help them succeed with ‘leapfrog’ efforts.” Initial Plans for FUSE Labs involved about 80 employees from Microsoft Startup Labs, based in Massachusetts, along with the Creative Systems Group and Rich Media Labs.

One of the products out of FUSE Labs, Docs.com, allows Facebook users to create and share Word, Excel, and PowerPoint documents with .PDF support and full-text search.

That wasn’t Ozzie’s only contribution by far, but it’s perhaps as good an example of any of his strategic thinking. Cloud-based initiatives, incorporating social-networking aspects, seem like the way forward for Microsoft – but despite Ballmer writing “the cloud now full speed ahead in all aspects of our business,” it’s still a rapidly evolving space, and one that has yet to show any substantial monetary profit.

In other words, Microsoft could have continued to benefit from having a thinker like Ozzie onboard. And in his absence, the company will need to find another visionary that can help guide it through the coming paradigm shifts. What’s Bill Gates doing these days?