Bill Gates surrendering Microsoft helm


Posted at Jun 22 2008 09:53 AM | Updated as of Jun 22 2008 05:53 PM

Agence France-Presse

SAN FRANCISCO - A Harvard University dropout who ushered in the home computer age and made billions of dollars along the way will have his last official day of work at Microsoft on June 27.

Three people will essentially fill the void left behind when Bill Gates retires from the company he and friend Paul Allen co-founded in 1975.

Since Gate's began his transition from leading Microsoft to heading his personally-bankrolled charity, The Bill and Melinda Gates Foundation, his job as chief software architect has been handled by Ray Ozzie.

Craig Mundie inherited Gate's chief research and strategy officer duties, while former Harvard classmate Steve Ballmer became chief executive officer at the Seattle-based software colossus.

Gates left Harvard after two years to found the firm that became global powerhouse Microsoft. He later received honorary degrees from Harvard and other universities.

After retiring, Gates will remain chairman of the Microsoft board of directors and its largest shareholder.

"I don't think anything is going to drastically change the day he leaves," said Matt Rosoff of the private analyst firm Directions On Microsoft.

"If he thinks something is important and tells Steve Ballmer, Ballmer will listen to him."

Still, Gates's bespectacled nerdish visage is an integral part of Microsoft's image and his departure is symbolic, according to analysts.

"The challenge Microsoft has when the founder departs is remembering its heart," said analyst Rob Enderle of the Enderle Group in Silicon Valley.

"At some point the firm has to take the essence of what made Bill Gates successful and make sure that is preserved. Whether it is a company or a person, once you've lost your heart there isn't much left but a shell."

Analysts say there are signs that Microsoft has been struggling since Gates stepped away from managing operations several years ago.

Microsoft has "missed a number of opportunities" and the Windows and Office software on which its fortune is built have stumbled.

Microsoft's Windows Vista operating system released in January of 2007 has flopped with customers, many of whom are clinging to its predecessor Windows XP.

"They are in trouble on the desktop (computer software)," Enderle said. "Microsoft started as a desktop vendor and suddenly it is its weakness."

Meanwhile, Apple's Macintosh computers have been gaining popularity.

While Windows is still used on 90 percent of the world's computers, Macintosh computers using Apple operating systems has grown to more than five percent of the market.

The software giant also sees its bottom line threatened by Google, which offers free online programs that compete with Office and other packaged software sold by Microsoft.

Microsoft failed in a recent bid to buy Yahoo for nearly 50 billion dollars in order to combine online resources to better battle Google in the Internet search and advertising market.

Enderle said he doesn't see "Gates's fingers" in the attempted Yahoo takeover, and Gates was likely among board members that backed pulling the plug on acquisition talks.

"Microsoft has to leverage its strengths; right now it is thrashing a bit," Enderle said. "The company is on its own. The training wheels are off. It needs a way to point itself in the right direction and peddle like hell."

Microsoft's server and tools division is its most profitable unit. It's entertainment unit, which sells Xbox videogame consoles and gaming software, has yet to make a profit.

"You could see Microsoft struggling after Bill Gates stepped out of day-to-day roles," Enderle said.

"A founder takes such a larger-than-life role and directs a company in very subtle ways that are often forgotten when a founder leaves. That gap, for a lot of companies, has been almost terminal."