Updated: Microsoft announced Thursday that chairman and chief software architect Bill Gates will be taking a reduced role in the company in July 2008. Gates will leave the day-to-day role in the company he founded to focus on the charitable work of The Bill & Melinda Gates Foundation.
Though Gates' move won't come for another two years, two leaders at the company, chief technical officers Ray Ozzie and Craig Mundie, are taking new roles right away.
Effectively immediately, Ozzie is the company's chief software architect, and Mundie is Microsoft's chief research and strategy officer.
"I've decided that two years from today I will reorder my personal priorities," Gates said in a surprise press conference. But, he emphasized that he "will work full time for Microsoft for another two years. This gives us time to make a strong transition," said Gates. "I believe we can make this transition without missing a beat."
Gates is Microsoft
Gates started Microsoft in 1975 with his childhood friend Paul Allen. In January 2000, he stepped down as president and became chief software architect and chairman.
It's not always appreciated just how much Microsoft has stirred the pot. And for many, Microsoft is Bill Gates. IT executives and administrators will likely recall how Gates has, to a great extent, forced computer industry change. "We tend to think of Microsoft as it is today, but if you go back 10 or 15 years, a lot of what we think is standard practice [in the computing industry] was created by Microsoft," said Steve Kleynhans, vice president at Gartner Inc. in Stamford, Conn.
Although Microsoft was not always the creator of new ideas, the software company has done much to popularize personal computing and make it broadly available to the masses. Applications like Office are pervasive around the globe. A decade ago, these tools were in the hands of some, but not all of the people, Kleynhans said.
Industry icons in transition
The Gates transition comes just months after another icon of the computer industry, Sun Microsystems Inc.'s Scott McNealy, said he would step down from his position after 22 years at the helm of that company. "If Scott McNealy can do it, so can Gates," said Jonathan Eunice, a principal at Illuminata Inc., a Nashua, N.H.-based consulting firm. "These guys have taken their companies through significant transitions in what their companies produce, and both feel they are at a reasonable point. They have a reasonable group they can hand over to. That's not always the case," he said.
"Microsoft has made individuals and small computers relevant," Eunice said. "Much in the way that Sun was making Unix important to computing, Microsoft made individual actions important, though they were not the only ones. The company has made the shift from servers to XML. It's fought a lot of major battles," he said.
Now Gates is making a major shift of his own. "I don't know what it's going to feel like to not work here for 10 hours [a day]," he said on a conference call today.
Gates called his working with chief executive officer Steve Ballmer as "one of the greatest business partnerships of all time." Ballmer will remain in his role as CEO.
Many doubt that Gates will be completely out of the loop because it is, to a great extent, his company. But in 50 years, Kleynhans said he doubts that Gates will be remembered as the Microsoft guy, but rather as the philanthropist. "In many ways I think that is how he will want it," Kleynhans said.
Microsoft in flux
The announcement comes at a time when Microsoft appears to be in transition, both in regard to its strategy and its top management echelon. Its Longhorn operating system has been criticized as abnormally late. It is seeing a new upstart competitor in Google, to go along with a wide assortment of competitors that include Apple in desktop system software and media players, IBM in data centers, and Sony in electronic games. The company's stock has been standing still in recent months.
"He's not leaving he's just changing responsibilities," said programmer and industry observer Mike Gunderloy of Larkware. "It is too soon to tell what the effect will be."
Gunderloy said Mundie's and Ozzie's early actions will be closely watched.
"There is not another Bill Gates out there. Whoever they put in that job, people are going to say, 'They are not another Bill Gates,'" said Gunderloy.
Ozzie, the mind behind Lotus Notes, joined Microsoft last year when it acquired Ozzie's Groove Networks, a collaboration software firm. Elements of Groove Virtual Office are making their way into Microsoft's SharePoint suite.
Mundie came to Microsoft in 1992 to run the Consumer Platforms Division, which developed the company's non-PC operating systems. He also led the company's digital television efforts.
Gunderloy was impressed with Gates' move to focus on philanthropy. "He's been doing this for 30 years," he said. "He's been doing it for a long time. If he wants to go give away money, now good for him, he deserves it. "