Jeff Raikes, president of the Microsoft Business Division and one its longest-running executives, plans to retire from the company in nine months, the company said in an announcement that just crossed the wire. He'll be replaced as divisional president by Stephen Elop, formerly chief operating officer at Juniper Networks Inc., the company said.

Raikes, 49, was key to the development of the Microsoft Office suite, among many other positions at the company. He came to Microsoft from Apple in the early 1980s. He has been a top lieutenant of Bill Gates, who is retiring from the company this year.

Update, 2:56 p.m.: As part of the announcement, the company says its Server & Tools Business will move out of the Microsoft Business Division, and the top Server & Tools executive, Bob Muglia, will report directly to Microsoft CEO Steve Ballmer.

Update, 3 p.m.: Excerpts from an e-mail to employees from Ballmer.

FROM THE ARCHIVES Talking to Seattle University business students in November 2004, Raikes reflected on his decision to join Microsoft from Apple, and discussed his business philosophy. Raikes is also known for an e-mail he sent in 1997 to investor Warren Buffett, describing the company's business strategy. It was later used against the company in antitrust proceedings.

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.

Update, 3:15 p.m. More management exits: Charles Fitzgerald, general manager of platform strategy, is also leaving the company, Mary Jo Foley reports. This follows yesterday's news of acquisitions chief Bruce Jaffe's planned departure.

Update, 3:45 p.m. Excerpts from Raikes' e-mail to employees:

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've 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. ...

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.