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It Had to Happen Sometime: Gates (Slowly) Passes the Torch

Everybody needs to calm down.

Sure, Bill Gates' announcement last week that he'll be leaving his day-to-day responsibilities at Microsoft in 2008 is probably the biggest news to ever come out of Redmond. After all, Gates is the architect and talisman of the company, the public face not just of Microsoft but, for many, the technology industry as a whole. All of that is obvious.


http://rcpmag.com/news/article.aspx?editorialsid=7536

And, there's an air of nervous anticipation among Microsoft watchers regarding the ascent of Ray Ozzie to head technical guru and the restructuring of the team that will take Microsoft forward on the technology front. We get that, too.


http://rcpmag.com/news/article.aspx?editorialsid=7537

So, yeah, this is a big deal, no question. But check out some of the reactions to Gates' announcement. Nobody seems quite sure what to make of it. We've got those who have already started to talk about a "revolution":


http://weblog.infoworld.com/techwatch/archives/006812.html

...and those who don't expect too much of a change in the status quo:


http://seattletimes.nwsource.com/html/businesstechnology/2003070379_brier19.html

Then we have those who just don't know what to think:


http://www.internetnews.com/bus-news/article.php/3614206

...and so their headlines end in question marks:


http://www.usatoday.com/tech/techinvestor/corporatenews/ 2006-06-18-microsoft-future_x.htm?POE=TECISVA

You'll notice in all of these stories that the usual suspects -- analysts, pundits and commentators -- are all over the place on this one, too. Gates' decision, although not exactly a big surprise to many, has led to a general freak-out, a sort of near-panic about the state of the company that is so critical to the financial futures of so many players in the industry. But that panic is ridiculous and unnecessary on several levels.

First of all, Gates has said for years that he couldn't see himself running Microsoft at 50. Well, he's 50 now. Second, Gates has slowly been distancing himself from running Microsoft for years. He turned the CEO role over to Steve Ballmer six years ago, and it's obvious that he's been spending more and more time over the last few years working with his charitable foundation. Third, when Microsoft acquired Ozzie's Groove Networks last year, the buzz was that Ozzie would eventually become the new Gates -- or at least head of a team to replace Gates -- on the technical side. Fourth, Gates' departure from his day-to-day role is still two years away, which signals that Microsoft has learned something about leadership transitions after the somewhat uncomfortable Gates-Ballmer CEO handoff. Gates isn't walking out the door tomorrow.

What will Gates' departure and Ozzie's takeover mean for Microsoft from a technology perspective? What course will the company set for its future? Right now, despite all the speculation, nobody knows for sure. And that's OK because we don't have to know right now. You'll notice that Wall Street reacted coolly to Gates' announcement; Microsoft's stock price barely budged the next day. We should all take a cue from the button-down types. Partners, customers and observers have a couple of years to watch the Microsoft transition -- one that obviously has a plan behind it -- and to offer their input on it, which, we hope, Microsoft's new brain trust will receive with an open mind. So, there's no need to panic...for now.

What should be the first thing on Ray Ozzie's agenda as chief software architect at Microsoft? What do you think of Bill Gates' decision to step down? Tell me at lpender@rcpmag.com

Posted by Lee Pender on 06/19/2006 at 1:19 PM


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