"I was running what was known as a central marketing group,
which had functional services that could be used by the eight
business groups we had but we didn't have specific product
marketing teams. Now it's all in one place," Mr. Capossela
Of course the same could have been said the last time Microsoft
overhauled its marketing organization -- eight months ago. Only
this time Mr. Capossela has control over budgets.
When Mr. Nadella's predecessor Steve Ballmer
reorganized the company's businesses and leadership last
summer, his aim was to coalesce a company known for its
infighting into "One Microsoft." Interestingly that realignment
shifted Mr. Capossela out of the marketing department.
But rather than look outside the company for a big-name marketer
to underscore the fresh start -- say, the well-respected Wendy
Clark of Coca-Cola or Beth Comstock of GE -- Microsoft replaced Mr.
Capossela with an insider: Tami Reller, former CFO of an accounting
software firm that Microsoft acquired in 2001. She had served as
CFO and CMO of Windows before being named executive VP of marketing
last July. Now Ms. Reller is out the door and Mr. Nadella handed
the reins back to Mr. Capossela.
"As a marketer, we're in so many businesses we
often have to see ourselves as a leader and challenger."
Described by an ex-colleague as "a product person at heart," Mr.
Capossela's most recent role in the consumer channels group was
considered more in his wheelhouse than marketing was. As corporate
VP of Microsoft's consumer channels group, Mr. Capossela worked
with retailers and telecom companies to juice sales of Microsoft's
consumer-focused products like the Xbox gaming console, Surface
tablet and Windows smartphones.
Prior to that, Mr. Capossela had some success as a VP in the
Microsoft Office Division marketing Office, Office 365, SharePoint,
Exchange, Lync offerings and even oversaw the launch of Office 2007
While his consumer-marketing background is thin, that stint may
prove useful as Mr. Capossela looks to navigate Microsoft's
"The fact is we are a clear market leader in some businesses and
when you are you drive a campaign in a certain way, but some ways
we're challengers as with search, phone, and in the tablet
[market]," said Mr. Capossela. "As a marketer, we're in so many
businesses we often have to see ourselves as a leader and
Former Microsoft marketing executives characterized Mr.
Capossela's marketing strategy as "product-driven" and label him
"an operations guy." He is someone who makes sure the trains run on
time but isn't interested in uprooting the tracks, they said. One
former Microsoft marketing executive said that Mr. Capossela
"delegated everything" and did not micromanage, though he would ask
to be kept apprised of progress.
Mr. Capossela's relatively passive style contrasts with his
predecessor Mich Mathews, who
stepped down as CMO in 2011. Over two decades at Microsoft, Ms.
Mathews burnished her reputation among employees as a singular
marketing powerhouse. She guided the brand through its antitrust
investigation and was willing to go toe-to-toe with Bill Gates over
perceptions of the company, said former employees. Even after Mr.
Capossela took over, Microsoft marketers would call Ms. Mathews on
the sly for counsel, said a former Microsoft marketing
Then came Mark Penn. Mr. Ballmer hired Hillary Clinton's political
strategist in July 2012. Mr. Penn
wasted little time before infusing fresh blood into Microsoft's
messaging and drawing some from its rivals. The mastermind
behind Microsoft's Google-takedown campaign "Scroogled," his
D.C.-style mudslinging has met with mixed reviews among Microsoft
employees. Mr. Capossela is said to have disliked the direction Mr.
Penn took Microsoft's marketing, but he declined to discuss the
"Scroogled" campaign in an interview with Ad Age.
But that's history. Coinciding with Mr. Capossela's
re-appointment, Mr. Penn has been named chief strategy officer and
has ceded control of Microsoft's
$1.1 billion ad budget to Mr. Capossela, who now reports
directly to Mr. Nadella. That appears to be a welcome change.
Microsoft employees are said to view Mr. Capossela as "a great
people manager, good communicator and not derisive like Mark Penn,"
according to an ex-colleague. One former Microsoft marketing
executive said Mr. Penn's contract is set to expire in June, which
if true may have spurred the most recent shake-up.
Mr. Capossela will have an early chance to brand Microsoft's
marketing as his own.
In January Microsoft began an extensive agency review, in which
Mr. Penn was said to be a top decision-maker. Will Mr. Capossela,
like Mr. Nadella, commence his tenure with an incremental twist on
his predecessors' strategy? Or would he do something as radical as
consolidate its agencies into a single dedicated shop for this new