Microsoft's server strategy has evolved quickly over the past few years, with the introduction of Server 2008, the platform and Windows Azure, a service that lets developers build on the Microsoft cloud.

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Q&A:

Windows Server 2008 generally gets high marks from customers, but Microsoft is still trying to prove itself in the virtualization and cloud markets. Cloud computing in particular is what Ballmer stressed in an to all Microsoft employees. 

"Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth," Ballmer wrote. "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.