Microsoft Business Division Head Jeff Raikes to Retire

Bruce Jaffe, Microsoft's corporate vice president for corporate development, will also depart this year.  

The executive brain-drain at Microsoft is picking up pace, with Jeff Raikes, a 27-year company veteran and president of the Microsoft Business Division, announcing his retirement Jan. 10.

And, in an unusual move, Microsoft has decided to replace Raikes with an outsider, rather than promote from within its ranks, giving Stephen Elop, the former chief operating officer for Juniper Networks, the position.

Elop will assume responsibility for the Information Worker, Microsoft Business Solutions and Unified Communications businesses at the end of January.

Microsoft also announced Jan. 10 that Bob Muglia, the senior vice president of its Server and Tools Business, will not report to Elop, but rather directly to CEO Steve Ballmer.

Raikes' announcement follows hot on the heels of the news that Bruce Jaffe, Microsoft's corporate vice president for corporate development, with responsibility for acquisitions and joint ventures, was leaving the software giant at the end of February after 12 years with the software maker.

Raikes will remain onboard until September to ensure a smooth transfer of his daily responsibilities and management of the division. He will also stay on as a member of the company's senior leadership team, which oversees and guides the development of core business strategy, Microsoft said in a statement.

The company also noted that, under Raikes' leadership, annual revenue for the Microsoft Business Division had nearly doubled to more than $16 billion, and had grown to include a number of business productivity offerings, including the Microsoft Office system, Microsoft Dynamics and Microsoft Exchange Server.

During his 27-year tenure at Microsoft, Raikes shaped the product strategy and design of Microsoft Office, and later led the Office Systems team, and was also later responsible for Microsoft's sales, marketing and service initiatives.

In addition, Bill Gates, Microsoft's co-founder and chairman, is stepping down from his day-to-day duties at the company and moving full-time to the Bill and Melinda Gates Foundation in July.

While Raikes was unavailable to discuss the reasons for his retirement with eWEEK, Raikes said in a statement that given the success of the business and the depth of leadership in place today, the time was right for him to leave the business in the hands of a new generation of leaders.

But Microsoft CEO Steve Ballmer was upbeat about Elop joining the company's executive ranks, saying in a statement that "the addition of Stephen and his wealth of experience in the technology industry is a great example of how we continue to add new talent to help manage our growing portfolio of businesses.

Rob Helm, an analyst with Directions on Microsoft, was surprised at the news of Raikes' retirement, saying it is a significant loss for Microsoft as he is the person with the broadest experience inside the company and was at the front of the queue to become CEO.

"He deserves credit for keeping the Office business growing, year in and year out, for a very long time, and for diversifying that business into servers like SharePoint and Project Server. I don't know a lot about Stephen Elop, but Macromedia has been one of Microsoft's more successful competitors for developers, and it might well take a former CEO to manage the huge business that Raikes has been responsible for," he told eWEEK.

For his part, Elop, who has also been president of worldwide field operations at Adobe Systems and president and CEO of Macromedia, said "I'm thrilled to be joining Microsoft, whose software and services touch literally hundreds of millions of people around the globe each day."