06/16/2006: "Local View On Gates Stepping Down"

By Mark Anderson

Bill Gates has announced his future retirement as an operating officer, set for 2008.

Even with this transition, the plan appears to be to step down immediately from the position of Chief Software Architect, which job CTO (and SNSer) Ray Ozzie will assume immediately.

At the same time, Executive VP and CTO (and SNSer) Craig Mundie will retain his policy portfolio, while adding Research and Strategy. Steve Ballmer remains in the CEO seat.

Billg plans to remain as Chairman for the foreseeable future, and Ballmer plans to use his friend for advice on an ongoing basis.

What does this mean to Microsoft?

While the company under Bill has been an aggressive defensive player, always the fast (or slow) follower of others' hits, they have since run out of taillights. Strategically, this has been a disaster.

Wall Street, I believe, caught on to this a year or two ago, and has been taking a "Show Me" attitude about whether the company will ever come up with a new revenue stream worth at least one SNS Poker Chip ($2B).

Ray Ozzie has built at least two major flagship products that were new, in new categories. He tends to look at human behavior, and then think of new solutions which fit and assist that behavior (Exhibit A: Groove Networks).

While Wall St. may continue to take a Wait-and-See approach, I suspect that this will be perceived by the folks who understand this industry as a positive move.

Craig Mundie comes to this promotion after a huge personal win in seeing China reverse its age-old position on Intellectual Property Rights piracy, with a plan announced just before Hu Jintao's last Seattle visit that will pay MS between $1.5 and $2B next year in pre-installed operating systems.

It makes sense, therefore, that he should continue his work in the policy arena, even as he takes on additional roles in Research and Strategy.

For those SNSers who agree with my comments in today's earlier issue of SNS, and in earlier issues on the subject (*SNS* The Future Of The Phone, 11.2.2004), the phone is becoming the target of greatest technological innovation. Craig's prior background at Motorola should help the company move into unexplored radio-based services beyond simple telefony.

All in all, I see this as a net positive for Microsoft, for its employees and its shareholders.

I also think it is important to note that Bill Gates (working with Melinda) already has forged a new reputation for himself as the most generous philanthropist in world history. "Dream large dreams," Churchill once said, "for little dreams have no power to move mens' souls." Eradicating world diseases, and improving global education levels, are just such dreams.

There is every reason to believe that Bill will have a happier, more productive, and more globally beneficial second half of his life, having made this decision. Why in the world not do it?

One week ago, I was talking with my longtime friend and past fund partner, Scott McAdams (CEO of McAdams, Wright Ragen), about Microsoft. We both agreed that things looked pretty grim for the company and the stock.

"What would it take to fix things over there?" he asked.

"What they ought to do," I told him, "is get rid of Billg."

"You think so? Who would they put in his place?" Scott asked.

"Ray Ozzie."

My congratulations to Bill for making a tough, but wise, decision, for himself, for Microsoft, for his family, and for the world. The planet needs someone with his strategic intelligence and drive, helping to solve its current problems.

This move will be beneficial for everyone involved.

Mark Anderson
Publisher
Strategic News Service

( Mark Anderson lives on San Juan Island and is the CEO of the Strategic News Service (SNS) and its consulting practice, Technology Alliance Partners (TAP), and is chairman of the Future in Review (FiRe) Conferences. SNS was the first subscription-based newsletter on the Internet and is read by technology industry leaders and investors worldwide.)