Who is Microsoft's new business division leader, Stephen Elop?

When he was at Macromedia, he had a nickname: 'The General'

Stephen Elop, the new head of Microsoft Corp.'s business division, may be a mystery man to those outside of Silicon Valley. But those who have worked for him say Elop, 44, is a no-nonsense, hardworking sales executive who helped take Flash maker Macromedia Inc. to new heights during the dot-com boom and, as short-term CEO during the subsequent downturn, helped the company survive by engineering its acquisition by rival Adobe Systems Inc.

"His nickname was 'The General,' " said Chris Swenson, a software analyst at NPD Group Inc., who was an employee at Macromedia during Elop's tenure.

With his military-style flat-top haircut, Elop stuck out among the "young, green-haired and pierced employees" at the San Francisco company, Swenson said. "He's the kind of guy who probably gets heavy starch on his dress shirts."

Even so, employees seemed to respect him. "He seems very, very bright and down to earth," he said. "And let's face it, you want your executives to be the grown-up ones."

Stephen Elop, the new head of Microsoft Corp.'s business division

Stephen Elop, the new head of Microsoft Corp.'s business division "Stephen is one of the most hard-charging, energetic guys I've ever met," said Umesh Ramakrishnan, vice chairman at Centreville, Va., executive search firm CTPartners, who has worked with Elop on career moves in the past. "He works 24/7. And he has an uncanny knack for predicting where the software market is headed."

For instance, according to Swenson and Ramakrishnan, Elop pushed Macromedia to get Flash into the mobile market. Those efforts bore fruit: Flash software resides on more than 300 million phones today, and Adobe -- which bought Macromedia -- hopes to get Flash onto a billion phones by 2010.

A native of Canada with a degree in computer engineering and management from McMaster University in Ontario, Elop was a director of consulting for Lotus Development Corp. before becoming CIO for fast-food maker Boston Chicken Inc. He moved to Macromedia's Web/IT department in 1998 before gradually shifting to the sales side, eventually heading up worldwide sales and operations as chief operating officer.

Elop became Macromedia's CEO in January 2005. Three months later, Adobe announced plans to buy Macromedia for $3.4 billion in stock.

Elop did well financially with the acquisition. According to a U.S. Securities and Exchange Commission filing from December 2005, Elop held 170,330 shares of Adobe stock worth about $5.1 million when he left six months later, as well as 751,870 stock options, which if exercised, would've been converted into shares worth $22.5 million when he left.

Elop resigned in June of 2006 without a firm destination. He joined nearby Juniper Networks Inc. as COO in January 2007. And while the Sunnyvale, Calif., telecom equipment maker may have seemed like an unusual choice, being at a big-league networking vendor helped Elop land his current job, Ramakrishnan said -- especially with Microsoft betting on its Unified Communications business.

"I always thought he was on the short list for any senior-level position, but the fact he was at Juniper certainly added to his resume," he said.

Filling Jeff Raikes' role won't be easy. The longtime Microsoft executive -- he joined as a product manager from Apple Inc. back in 1981 -- was considered instrumental to the dominance of Microsoft Office, the company's second most important product behind Windows.

After a reorganization in mid-2005, Raikes became one of three division presidents at Microsoft reporting to CEO Steve Ballmer. His role appeared to grow last year when Microsoft's business division added the nascent Unified Communications products, including Exchange Server, as well the server and tools group, which includes Windows Server and Visual Studio.

Swenson thinks Elop's main challenge will be to continue Raikes' legacy and maintain Office's lead against challenges from free, open-source competitors such as OpenOffice and free, Web-based competitors such as Google Apps.

Elop is up to that task, Swenson said. "He knows both the retail and enterprise channels. It's very rare to find a guy who knows both."

Ramakrishnan thinks that growing the Unified Communications business, however, is where Elop needs to make his mark. "The entire market is headed towards the convergence of telecom, media and technology," he said.

While some high-profile executives already at Microsoft might have hoped for Raikes' position, Ramakrishnan doesn't foresee an exodus following Elop's hiring. "The risk was [from] not bringing in someone from the outside. Look at where Microsoft has been: There are lots of issues with the OS and development time. The stock hasn't done much. For the past five years, the company has been run by longtime insiders. Microsoft needed an infusion of new blood."

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