Microsoft shake-up: The e-mails on President Raikes' depature

Summary:We know what Microsoft told press and analysts about yesterday's announcement by Microsoft Business Development (MBD) President Jeff Raikes that he'll be passing the torch, come September, to former Juniper Networks Chief Operating Officer Stephen Elop. But what did Raikes and CEO Steve Ballmer tell Microsoft's near-80,000 employees about the move?

We know what Microsoft told press and analysts about yesterday's announcement by Microsoft Business Development (MBD) President Jeff Raikes that he'll be passing the torch, come September, to former Juniper Networks Chief Operating Officer Stephen Elop. But what did Raikes and CEO Steve Ballmer tell Microsoft's near-80,000 employees about the move?

Ballmer and Raikes both emphasized that MBD -- the Microsoft division that comprises the Microsoft Office, Microsoft Dynamics, unified communications and Server and Tools business (although the latter is being moved out from MBD) -- is on track and on course. They also played up the stability of the company and its strategies, in spite of some big executive changes (Raikes' retirement and Gates' ceding of his day-to-day duties) in 2008.

The anonymous blogger Mini-Microsoft raised some interesting points about Microsoft's choice of a largely unknown outsider ("Stephen 'Who' Elop?") for the top MBD job. Maybe Microsoft decided it needed an injection of fresh and communications-centric blood in its enterprise software business. But as Mini notes:

"I found it ironic that while Mr. Ballmer in the announcement email was praising Mr. Raikes ability to recruit, mentor and nurture Microsoft leadership, Raikes was not being replaced by someone he groomed. I tell you, if I was a Raikes direct I would seriously be considering whether I was ready for a new challenge, at Microsoft or elsewhere."

Read on for the e-mails from Ballmer and Gates Raikes that went out on January 10.

From: Steve Ballmer Sent: Thursday, January 10, 2008 To: Microsoft - All Employees Subject: MBD Leadership Changes

With very mixed emotions, I want to share the news that Jeff Raikes is announcing today that he will retire from the company in September, 2008. For more than 26 years, Jeff has been both a great businesses partner and a close friend. My relationship with Jeff extends all the way back to 1981 when I recruited him to come to Microsoft from Apple. He will be greatly missed when he leaves the company in September.

Related to Jeff’s announcement, I’m excited to let you know that we have hired Stephen Elop to be Jeff’s successor. Stephen, who until today was chief operating officer at Juniper Networks, will take over as president of the Microsoft Business Division beginning in late January. Jeff will continue to serve as a member of the company’s Senior Leadership Team, and he will work closely with Stephen to ensure a smooth transition. As part of this transition, our Server and Tools Business will move out of MBD and Bob Muglia will report directly to me. This move will enable Stephen to concentrate his efforts on continuing to build MBD.

Very few people have contributed more to Microsoft than Jeff. For more than 20 years, he has been the chief strategist behind the establishment of our information worker business, from our earliest productivity applications to the creation of Office to our ongoing success at redefining and expanding the Information Worker (IW) market as we’ve moved into new businesses including collaboration, businesses intelligence, unified communications, and much more. Jeff was also pivotal in creating what is now our Worldwide Sales, Marketing and Services Group and in providing the foundation that has made our sales organization so successful. His passion for demonstrating the value and magic of software to customers, partners, and employees is unparalleled.

Equally important, Jeff has played a central role in recruiting and nurturing great people at Microsoft. Jeff was one of the earliest and most vocal proponents of the importance of diversity at the company and has worked tirelessly to develop talent at Microsoft. I know Jeff has been a great mentor for many people across the company.

As much as we all will miss Jeff, he begins this transition period at a time when the company is in great shape. MBD has incredible momentum and the division’s leadership has never been stronger.

I am also extremely pleased that Stephen will join the company later this month as president of MBD. He is one of the most talented and experienced executives in this industry. With his record of success at Juniper, Adobe, Macromedia, and other leading companies, I believe he is uniquely qualified to step in for Jeff. I look forward to working with Stephen to build on the strong foundation that Jeff has created as we continue the amazing success and growth in our business.

Again, I want to thank Jeff for his incredible contributions to our company and our industry. He has been an integral part of Microsoft for such a long time and he embodies everything that makes this company a great place to work. He will be greatly missed when he retires from the company next fall. In the meantime, I am glad that I will have the opportunity to continue to work closely with him during this transition period.

I hope you will all join me in thanking Jeff and welcoming Stephen to the company.

Steve

(Go to the next page to read Jeff Raikes' all-employee e-mail.)

From: Jeff Raikes Sent: Thursday, January 10, 2008 To: Steve Ballmer; Microsoft - All Employees Subject: RE: MBD Leadership Changes

I’d like to add to Steve’s mail by sharing some of my thoughts about this decision and my optimism for MBD and for Microsoft’s path ahead. I want to underscore Steve’s point that I’ll be fully committed to advancing our business through this transition period.

For some time – really since returning to the business group from my role in leading the Worldwide Sales Marketing and Services organization in 2000 – it’s been clear to me that the balance of my career at Microsoft would focus on achieving two key objectives:

· Leading the transformation of the Information Worker (IW) business

· Helping prepare the next generation of leadership for the company

Today our business is in great shape as our financial results and our vastly expanded product portfolio clearly demonstrate. Back in 2000, we had a business with single digit growth and limited growth opportunities. Since then, we have significantly broadened our definition of information work, we’re now growing in the double digits, and our prospects for future growth are terrific. I’m proud that the team has achieved this even faster than I thought possible.

Looking forward, the incredible customer response to the 2007 Office system continues and we are in excellent shape to deliver on our wave 14 offerings. Our Unified Communications business is on its way to redefining business communications through the power of software. Microsoft Business Solutions is well positioned with strong leadership in place to add its next billion dollars in revenue. I am pleased to see us embrace the software + services opportunity across our business. While we still face a broad set of challenges from a number of formidable competitors, I’m confident we are poised for continued success.

I am also very pleased with the progress we have made in developing the next generation of leaders for Microsoft. We have a terrific set of leaders who will step up as I move on – some, like Bob Muglia, have developed through long careers at Microsoft. Others bring valuable experiences and perspective from outside our organization. Stephen Elop is a great example of the latter. I’ve enjoyed getting to know Stephen and am confident he’ll be a great leader for MBD and Microsoft. I look forward to partnering with Stephen to facilitate a smooth transition. It has been a pleasure to work closely with Bob this past year and I believe he, Stephen, and their teams are set up for continued success.

The time is right for me to leave the MBD business in the capable hands of our new generation of leaders. Our business and leadership are in great shape. I am confident my decision is the right next step for me personally and is also the right next step for Microsoft.

This has been a difficult decision and one that I’ve given a great deal of thought to. Since 1981, I have devoted my career to Microsoft and have grown and benefited immensely from my time here. The greatest satisfaction for me has come from knowing the work I do every day is focused on improving our customers’ lives. I want to thank so many of you for making my career at Microsoft so rewarding. I have loved working with you and appreciate your contributions to this company’s success. I look forward to the opportunity to stay very engaged on the business and work closely with Stephen, Bob, Steve, MBD leaders and many others between now and the fall.

Jeff Raikes President Microsoft Business Division

***

I'm still curious about why Microsoft decided to move Senior Vice President Bob Muglia's Server and Tools unit out of MBD. Any guesses on that one?

Topics: Microsoft, Banking, Collaboration, CXO

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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