Microsoft Corp. said Thursday that Jeff Raikes, the top executive in its business software division, will retire in September.
Stephen Elop, chief operating officer at networking equipment maker Juniper Networks Inc., will replace Raikes, the software maker said.
Raikes, 49, was recruited to Microsoft from Apple Inc. by Chief Executive Steve Ballmer in 1981.
Raikes was named president of Microsoft Business Division in 2005. Since then, he has been responsible for a wide swath of some of Microsoft's most profitable applications, including the Office suite, Microsoft's server software and applications that help businesses track customers and business processes.
In the first fiscal quarter of 2008, the division brought in $4.1 billion in sales, or about a third of Microsoft's total revenue.
Elop, 44, will report to the company's Redmond, Wash., headquarters at the end of this month. He will take over most of Raikes' responsibilities during the nine-month transition period. However, Bob Muglia, senior vice president of the server and tools group and part of Raikes' organization, will move to report directly to Microsoft CEO Steve Ballmer.
"With Bill Gates' pending retirement, he was pretty much the No. 2 guy at Microsoft, certainly within product development," said Matt Rosoff, an analyst at the independent research group Directions on Microsoft.
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But Raikes, who also owns a stake in the Seattle Mariners, may not have wanted more.
"I don't think Steve Ballmer is planning to step aside any time soon, but even if he did, I'm not sure Jeff Raikes wants the CEO job," Rosoff said.
In an e-mail to employees, Ballmer wrote that Raikes "was one of the earliest and most vocal proponents of the importance of diversity at the company."
"He embodies everything that makes this company a great place to work," Ballmer added.
Before Juniper, Elop headed global sales for Adobe Systems Inc. and was CEO of Macromedia Inc., the company that developed Flash.
Microsoft and Adobe have been encroaching on one another's traditional turf recently, with Microsoft releasing Silverlight, a competitor to Flash, and Adobe eyeing software that runs on the desktop.
Shares of Microsoft dipped 8 cents to $34.25 in after-hours electronic trading, after closing Thursday at $34.33.