In an e-mail to employees earlier this afternoon, Microsoft CEO Steve Ballmer praised Muglia for his "talent, drive, vision, customer focus, and leadership," "qualities that enable us to see our opportunities clearly and pursue them with persistence and discipline." Ballmer continued:

"Few people at Microsoft embody these qualities more fully than Bob Muglia, and few people have contributed more to the company's success. So today, I am pleased to share the news that Bob has been promoted to President of Microsoft's Server & Tools Business.

"As senior vice president of STB, Bob has established Microsoft as the industry leader in providing great server products to companies of all sizes and in delivering the tools that enable developers and IT pros to build optimized solutions for their customers and companies. In the process, he has helped build a remarkably successful business that has grown from virtually nothing a decade ago to more than $13 billion in FY08. Today, STB accounts for more than 20 percent of the company's total revenue.

"More than that, Bob has built a culture of getting things done and done right. He has championed some of our most important initiatives and helped us successfully face some of our most important competitive challenges.

"Bob joined Microsoft 21 years ago, in January of 1988. I can think of no better way to acknowledge the importance of his contribution over the last two decades than to extend my congratulations to him for his new title. As always, I look forward to continuing to work closely with Bob to drive further growth for STB and the entire company."

Update, 4:30 p.m.: Muglia, previously a senior vice president, becomes one of four business organization presidents at the company. (Jean-Philippe Courtois also has the title president over at Microsoft International.) The others are:

Robbie Bach, Entertainment and Devices Division

Stephen Elop, Microsoft Business Division
Qi Lu, Online Services Group

A year ago, Microsoft had three executives with the president title, all of whom sat atop one of company's three giant product divisions -- Platforms and Services, Entertainment and Devices and Microsoft Business Division.

Now, Qi Lu, who was scheduled to start at Microsoft today, is president of the Online Services Group, which is part of the former Platforms and Services Division. It was split in two this summer on the departure of Division President Kevin Johnson. The other part is the Windows and Windows Live business, led by a trio of senior vice presidents -- Steven Sinofsky, Jon DeVaan and Bill Veghte -- all of whom report directly to Ballmer.

Organizationally, Muglia's Server and Tools Business was moved from the Platforms and Services Division to the Microsoft Business Division in May 2007. But Muglia, too, reports directly to Ballmer. And the business reports profit and loss as its own operating segment.

So, after a year of changes, Microsoft's organizational structure is now a better match to its financial reporting. In addition to Server and Tools, the company breaks out results for the Business Division, Entertainment and Devices, Online Services and Client (Windows).