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Microsoft's Raikes Takes Retirement

Thursday, 10 Jan 2008 | 7:02 PM ET

Jeff Raikes, president of Microsoft's Business Division, is calling it quits after 26 years at the company, announcing his retirement today. He'll be replaced by Stephen Elop, who most recently served as Juniper Network's chief operating officer.

Microsoft
Microsoft

The news comes as a bit of a surprise: The MBD has been performing admirably these last few years, doubling in revenue to a whopping $16 billion. And with the Vista upgrade cycle in full swing, you'd think the unit's leader would want to hang around a little while longer for the victory lap.

But Microsoft tells me that Raikes, and CEO Steve Ballmer, have been discussing his departure for the last several months, trying to pinpoint the right time, and fill the position with the right guy. They feel they've found him in the 44-year-old Elop. Still, someone with Raikes tenure at the company, his command of the facts and data, and his knowledge of the intricate workings of the company, not to mention the role he played on the global enterprise stage, is a real loss.

Further, some of his supporters -- and some on the Street -- felt he could be considered an heir apparent to Ballmer, and he was widely seen as Ballmer's successor during the turbulent times of Vista delays and other snafus at the company more than a year ago.

But with those issues squarely behind the company, and Ballmer digging in for a longer tenure, it was clear that Raikes had reached his peak at the company. Ballmer has already made it no secret that he planned to stick around as CEO until his youngest child completed high school, and that's still about eight or nine years away. That's a long time to wait for a guy who's been at the company going on three decades.

Keep in mind that Raikes is only one of three presidents at the company reporting to Ballmer, joined by Windows leader Kevin Johnson and entertainment and devices division head Robbie Bach.

Surprising that Microsoft would look outside the company for a Raikes replacement. But there you have it. Probably not enough to move the needle much, as far as the company's stock is concerned, but it should make for an interesting conference call when Microsoft reports earnings in a couple of weeks, with analysts wondering whether this is it, as far as a shake-up goes, or merely the beginning of more changes to come.

Raikes will stay on through his retirement date in September.

Questions? Comments? TechCheck@cnbc.com

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