Top Executive Raikes to Retire from Microsoft

Published: January 16, 2008

by Alex Woodie

Bill Gates won't be the only prominent executive to leave Microsoft this year. Last week, the company announced that Jeff Raikes, president of the Microsoft Business Division, will take his retirement this September following a 27-year career at the software giant. A former Juniper Networks executive will be brought in to replace Raikes. At the same time, Bob Muglia, head of the Server and Tools Group, will start reporting directly to CEO Steve Ballmer.

Raikes has had his hands in several of Microsoft products since he joined the company in 1981. He spent his early years working on the Office suite, and went on to become vice president of the Information Worker business before it became part of the MBD division during the reorganization in September 2005.

Raikes held several other jobs in the meantime, including vice president of the worldwide sales and support, and senior vice president of Microsoft North America. Today, he's a member of Microsoft's senior leadership team, and works with Gates and Ballmer on "developing and guiding Microsoft's core business strategy."

"There is no overstating the incredible impact Jeff has had during his amazing career at Microsoft," Ballmer said in a statement. "Leading our business division, Jeff and his team have delivered terrific results while reshaping and expanding the portfolio of our business-related products and services to ensure a very healthy future for our customers, partners, and Microsoft."

When the 49-year-old Raikes leaves the company in September, Muglia will start reporting directly to Ballmer, a sign that Microsoft is pleased with Muglia's work in Server and Tools--but not so pleased that they didn't give Muglia the reigns to MBD.

Muglia started reporting directly to Raikes when the Server and Tools Group was moved from the Platforms & Services Division to the MBD in the May 2007 reorganization. While Microsoft pointed out that, during Raikes' tenure, the MBD business has nearly doubled to become a $16 billion per year business, it also pointed out that Muglia has delivered 21 straight quarters of double digit "financial growth" (surely a GAAP measure) at Server and Tools, which reflects the success of a "robust" set of products in a "very competitive" market.

By putting Muglia in direct contact with the CEO, it could be an indication that Microsoft is regretting its decision last year to separate Server and Tools from the Platform & Services division, which also includes the divisions responsible for the development of client versions of Windows and its Windows Live offerings (the organizational chart on the Microsoft Web site depicting Microsoft's divisional structure is way out of date). Or, it could simply be a sign that Microsoft is grooming Muglia for a higher position at Microsoft.

Taking over for Raikes as president of MBD will be Stephen Elop, the former COO of network equipment maker Juniper Networks. Elop will join the company in late January to begin preparing for the transition in September, when Raikes leaves the company.

Elop, 44, was formerly president of worldwide field operations at Adobe Systems, which he joined following the 2005 acquisition of Macromedia, where he rose to become president and CEO after a seven-year career there.

Elop will now bring his hands-on approach to the Redmond, Washington, software giant. "I'm thrilled to be joining Microsoft, whose software and services touch literally hundreds of millions of people around the globe each day," Elop says.

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