Microsoft Begins Changing of the Guard
January 11, 2008 —
Three prominent Microsoft executives announced this week that they would be leaving the company, the most notable among them being Jeff Raikes, president of the Microsoft Business Division.
Raikes said today he will retire in September 2008, and will continue to serve as a member of the company’s senior leadership team. Raikes’ run with Microsoft lasted 26 years. Stephen Elop, former COO of Juniper Networks, will replace him in September. Raikes will work together with Elop during the transition.
In an e-mail sent to all Microsoft employees, CEO Steve Ballmer gave Raikes an effusive sendoff, highlighting his contributions to Microsoft and calling him a “great business partner and close friend.”
Many Microsoft watchers considered Raikes to be a candidate to become the company’s next CEO.
Ballmer claimed that Raikes was departing the company at a time when it is “in great shape” and the Business Division (MDB) has “incredible momentum.” As part of the transition, Microsoft’s Server and Tools business will be moved out of MDB, and Bob Muglia, senior vice president of the Server and Tools Business, will report directly to Ballmer.
Acquisitions head Bruce Jaffe will be leaving his post on Feb. 29. Jaffe oversaw more than 40 acquisitions over the past two years, including the US$6 billion buyout of aQuantive. Also departing is Charles Fitzgerald, Microsoft’s general manager of platform strategy.
Most recently, he had been a primary spokesman for Microsoft’s software and services strategy. Microsoft officials said Fitzgerald is leaving to join a startup.
Yankee Group analyst Laura DiDio said that Microsoft was in the midst of a generational shift. “A lot of theses people came up with Gates and Ballmer and have been there for a generation, and they are multimillionaires. If you won the lottery tomorrow how long would it take you to clean out your desk and do something else?” DiDio quipped.
Microsoft’s Gates will discontinue working at Microsoft full time in June, but will carry on as chairman and advisor while devoting more of his time to his charitable work.
The company has underperformed all of the major stock indices for four of the past five years, and its current dividend yield was 1.24 percent as of Jan. 2.
DiDio dismissed the notion of a shareholder revolt, noting that other high-profile members of Microsoft’s old guard were still present, including Muglia and chief research and strategy officer Craig Mundie.
“Microsoft is a company that is mature now, and not a startup like Google or Facebook. There are a few cracks showing, and it is to be expected,” she said, noting that while some of the company’s business units have underperformed, others have lived up to expectations, and others, like Xbox, have exceeded expectations.
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