Updated from 5:23 p.m. ESTMicrosoft ( MSFT) unexpectedly announced Tuesday that its CFO for the past five years is retiring to become a venture capitalist. After the bell, the Redmond, Wash.-based company said John Connors, a Microsoft employee for the past 16 years, will leave the CFO post to become a partner at a Seattle-area venture capital firm. Separately, Bellevue, Wash.-based Ignition Partners said Connors will join the venture capital firm, which was founded in early 2000 by a team of former senior executives from Microsoft and McCaw Communications, which was sold to AT&T ( T). Microsoft plans to consider both internal and external candidates to fill the opening. The company did not say in a press release when Connors is leaving but said he will assist with the transition. Under Connors' watch, Microsoft made a few notable moves on the financial front. Most recently, the moves included paying out the largest ever one-time special dividend last year, worth a total of about $32 billion; paying a regular dividend for the first time; and taking the lead in expensing stock-based compensation, bucking other tech industry resistance to such expensing. "He did come around to making the right decisions and understanding cost of capital -- give him credit for that -- which places him miles above other technology CFOs," Chris Bonavico, a fund manager with Transamerica Investment Management, said of Connors. But the CFO position at Microsoft is more important now than say 10 years ago, when the world's largest software company was enjoying rapid growth in PCs and servers and the Internet was new, Bonavico added. "Now you definitely need to be very, very efficient with your capital to make sure you're driving as much shareholder value as possible," said Bonavico, who holds Microsoft shares. "It means they need someone to replace him who's very capable at allocating capital very wisely because at this stage of the company capital allocation is of paramount importance." Shares of Microsoft recently edged up 11 cents, or 0.4%, to $26.84 in after-hours trading; the stock closed down 7 cents, or 0.3%, at $26.73.