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Kevin Johnson's move shocks Juniper, Microsoft partners

The Windows and Online Services chief is leaving Microsoft to become Juniper Networks' CEO, but partners don't see much business impact.

Kevin Johnson's departure from Microsoft to become Juniper Networks' CEO came as a major surprise to Microsoft and Juniper partners alike. But most agree it won't affect their businesses.

Microsoft announced the departure of Kevin Johnson, president of the platforms and services division (PSD), last night -- after The Wall Street Journal broke the news that he would become Juniper's chief executive. Johnson spent 16 years at Microsoft, and as PSD president was responsible for Windows and Microsoft Online Services. Both efforts have seen their share of setbacks, with Vista adoption woes widely reported.

"They really haven't seen any dramatic improvement" in Online Services, said Scott Millwood, president of Microsoft partner Customer Effective in Greenville, S.C. "I wouldn't call it a flop, but there haven't been any great results."

As for Windows Vista, "the product's fine, but the rollout of it was kind of a flop, or at least perceived to be," Millwood said.

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Microsoft will split PSD into two groups: Windows/Windows Live and Online Services, reversing an earlier move to combine the units. Three senior vice presidents will oversee the Windows effort and report directly to CEO Steve Ballmer, while Microsoft is searching for an executive to run the Online Services business, which many see as key to the company's future.

"That makes sense," Millwood said. "That's a big job. You've got the whole franchise in Windows. You can't screw that up. It's related to Online, but Online needs more focus and autonomy."

Michael Cocanower, CEO of Microsoft partner itSynergy in Phoenix, agreed.

"There definitely, definitely needs to be somebody who's focusing on the Windows platform," he said.

But neither Millwood nor Cocanower said they thought Johnson's departure would affect partners.

"Any time there's change, people are always uncertain," Cocanower said. "But the good thing is, with some of the hires they've made recently, they're in a good position to make the change -- not like they have a choice."

"From where we sit, it's a high-up, executive-level shuffle that doesn't hardly change a thing," Millwood said.

Juniper partners react

Among Juniper partners, there was mixed reaction to the news that Johnson will take over for CEO Scott Kriens -- but not a one saw it coming.

"When I first heard that he was coming from Microsoft, I was thinking, 'I don't know if that's a good fit,'" said Scott Foster, president of Austin Networking in Austin, Texas. "But then I thought, Microsoft treats the channel pretty well, I guess. There are a lot of times they don't need to be messing with the channel, but they still work with them."

Pat Grillo, president and CEO of Branchburg, N.J.-based Atrion Communications Resources, had a slightly different take.

"I'm not sure Microsoft has a great grasp of how to work with the channel in our industry," Grillo said. "I read the articles, and everybody is complaining about Microsoft, and I am saying, 'So why are they hiring these people?'"

But Grillo said it may not matter, because Frank Vitigliano and other Juniper channel executives are typically the ones who have made channel-related decisions.

"I would meet with [Kriens] once a year, and that was about it," Grillo said.

Foster said his business has quadrupled since the release of Juniper's new Ethernet switch, and he has received massive support from the company. He'd like to see things stay the same as much as possible under the new CEO.

He also said it will be interesting to watch how the new CEO works with Juniper's operating system, JUNOS. JUNOS is open, so it has the potential to be used on every component in the company and throughout the industry. Johnson comes from a company that knows how to work with a ubiquitous OS, which is a good thing, Foster said.

Microsoft fallout

Kevin Johnson was heavily involved with Microsoft's pursuit of Yahoo, and there is speculation that the months-long ordeal may have played a role in his departure.

The fact that Microsoft named no clear successor means Johnson's departure was unexpected even among top executives, one Microsoft insider told

"You have to wonder if the whole Yahoo mess stressed Ballmer and Johnson's relationship," the insider said.

Johnson sat beside Ballmer at a company meeting in Redmond on Wednesday, just hours before the news leaked -- and there was no mention at all of the impending change, the insider said. Johnson had also been on the agenda for Thursday's financial analysts meeting in Redmond. His name was removed upon the news.

Microsoft may well have become a no-win situation for Johnson, according to one analyst who follows the company.

"Either the Yahoo deal falls apart and Kevin Johnson takes the fall, or it comes together and [Yahoo CEO Jerry] Yang gets his job," the analyst said.

Some speculate that the contentious Yahoo-Microsoft talks may have poisoned the well for Yang if the two companies could work out a deal, but this analyst said Microsoft dearly needs the Web credibility Yang would bring.

"Microsoft has pretty much painted on its forehead that it doesn't get the Internet," he said. "This Yahoo pursuit shows that. So if the Yahoo deal … happens, they should keep Yang as someone with a lot of experience, who is not a newbie."

For the record, at today's Microsoft Financial Analyst meeting Ballmer said the Microsoft-Yahoo deal is over, although he did not foreswear a new round of talks should circumstances change. He also said his pursuit of Yahoo was tactical, not strategic, and the company can get to where it needs to be in online search and Web advertising on its own -- a claim doubted by many onlookers.

News writer Colin Steele, senior news editor Barbara Darrow and senior news writer Rivka Little contributed to this report.

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