Microsoft opens up to outsiders

Microsoft has hired another outsider to fill a key executive role--one more sign that the software giant's promote-from-within culture is fading.

The company said Thursday that Disney and General Motors (nyse: GM - news - people ) veteran Tony Scott will become its new chief information officer starting next month. The announcement comes just a week after Microsoft (nasdaq: MSFT - news - people ) tapped Stephen Elop, chief operating officer of Juniper Networks (nasdaq: JNPR - news - people ), to replace company veteran Jeff Raikes in the high-profile job of business division president.

For years, Microsoft prided itself on promoting from within. But industry experts say that the pace of innovation and competition in recent years has forced the company to bring in outside talent with fresh ideas. Last year, for instance, John Schappert, executive vice president of Electronics Arts, was named corporate vice president of Xbox Live, Microsoft's interactive entertainment division. In 2006, Microsoft hired Ask.com Chief Executive Steve Berkowitz to head its online services. And in 2005, Microsoft acquired Groove Networks and named its founder, Ray Ozzie, as its chief technical officer.

Indeed, half of the top 10 slots are now held by people who have worked at the Redmond, Wash., software giant for fewer than four years. Strict software experience is no longer required: These new Microsoft executives hail from a wide range of industries including retail, technology and entertainment.

A Microsoft spokesman said the company is "committed to both developing internal talent as well as recruiting great talent from outside the company." Even so, the list of outside recruits goes on and on.
n his role as chief information officer, Scott, 56, will manage the Redmond, Wash.-based company’s global information technology organization, which oversees worldwide sales, marketing, services businesses, enterprise systems and business applications.

Microsoft said Scott has more than 25 years of experience running global information technology operations for major corporations. Most recently, he was senior vice president and chief information officer at Disney, where he was the first chief information officer to manage companywide IT. Prior to Disney, Scott was chief technology officer at GM and vice president of operations at Bristol-Meyers Squibb. At Microsoft, he will report to Chief Operating Officer Kevin Turner.

Tony Scott replaces former chief information officer Stuart Scott, who was ousted several months ago for "violation of company policies." Microsoft wouldn't provide details about what policies were violated or how. The two men are not related, but Stuart Scott was also an outsider, joining Microsoft in 2003 from General Electric (nyse: GE - news - people ).

Rob Helm, director of research at Directions on Microsoft, says the chief information officer position is critical at Microsoft. Unlike other companies, Microsoft's CIO deals with both internal and external issues. At Microsoft, "the CIO is the first reference for customers," says Helm. "He has to go out and convince them Microsoft products are ready to use."

On paper, Scott looks like he has the right experience, Helm says. "He has done a lot of public speaking," he says. "A good public face is important for the Microsoft CIO."

Helm also said Scott appears technically proficient. At GM, he consolidated SAP (nyse: SAP - news - people ) systems, which should give him more clout with customers "Microsoft has wanted to be viewed like IBM--a strategic enterprise vendor," Helm says. "Customers rely on overall high-level guidance, not just 'sell us your parts and go away.' "

Microsoft wouldn't disclose details about the chief information officer search. Helm says GM is a very large Microsoft customer, and Scott is likely to be well-known to other Microsoft senior managers
Source: forbes