Ray Ozzie, Bill Gates' hand-picked replacement as Microsoft's chief software architect and the father of the Azure cloud, is leaving the company.

Steve Ballmer sent out an all-hands e-mail saying so Monday. Ballmer also said Ozzie will not be replaced. Ballmer calls his job "unique." In his place, Ballmer says Microsoft has "a strong planning process, strong technical leaders in each business group and strong innovation heading to the market."

There is no explanation for why Ozzie is leaving or what he will do next. Ballmer says he has no plans.

When exactly he departs is unclear; apparently he will be sticking around through a transition and paying some attention to the entertainment space before he leaves.

Here is the e-mail:

From: Steveb
Sent: Thursday, October 18, 2010
To: Microsoft - All Employees
Subject: Ray Ozzie Transition

This past March marked a significant milestone for the company when, in a speech at the University of Washington, I sent a message to the world that we're ‘all in' when it comes to the cloud. In that speech I noted that Ray's Internet Services Disruption memo nearly five years ago, and his work since, stimulated thinking across the company and helped catalyze our drive to the cloud.

As a company, we've accomplished much in the past five years as we look at the cloud and services. Windows Live now serves as a natural web-based services complement to both Windows and Office. SharePoint and Exchange have now decidedly embraced the cloud. And by conceiving, incubating and shepherding Windows Azure, Ray helped ensure we have a tremendously rich platform foundation that will enable app-level innovation across the company and by customers for years to come.

With our progress in services and the cloud now full speed ahead in all aspects of our business, Ray and I are announcing today Ray's intention to step down from his role as chief software architect. He will remain with the company as he transitions the teams and ongoing strategic projects within his organization - bringing the great innovations and great innovators he's assembled into the groups driving our business. Following the natural transition time with his teams but before he retires from Microsoft, Ray will be focusing his efforts in the broader area of entertainment where Microsoft has many ongoing investments. We have tremendous opportunities in the entertainment space overall, and I'm excited about what we can accomplish. Beyond that, Ray has no plans at this time. While he'll continue to report to me during the transition, the CSA role was unique and I won't refill the role after Ray's departure. We have a strong planning process, strong technical leaders in each business group and strong innovation heading to the market.

While Ray will be onboard for a while, I'd like to thank him today for his contributions to Microsoft, both as a leader and as a long-time Microsoft ISV. As an early ISV, Ray contributed significantly to the early success of Windows. Since being at Microsoft, both through inspiration and impact he's been instrumental in our transition toward a software world now centered on services. He's always been a ‘maker' and a partner, and we look forward to our continuing collaboration as his future unfolds. Ray has played a critical role in helping us to assume the leadership position in the cloud, and positioned us well for future success.

Please join me in thanking Ray and wishing him well.

• The Business of Cloud Computing: Ozzie on Cloud Margins
• Ray Ozzie: Who Can Keep Microsoft From "Growing Old Inside"?
• Microsoft's Ray Ozzie Thinks It's Still Early Days for Cloud Computing
• Microsoft Rejigs Whole Organization; Boosts Ray Ozzie, Developers, MSN to Forefront
• Microsoft Brings Lotus Notes Founder Ray Ozzie On Board As CTO
• Ray Ozzie Predicts Amazing, Pervasive Cloud-Centric IT World