Two years from now, Gates will put an end to his day-to-day duties at Microsoft, in order to donate more of his time to his charity, the Bill & Melinda Gates Foundation, he said yesterday. He will remain chairman.
Ozzie has been immediately promoted from chief technical officer to chief software architect, a role he will share with Gates until July 2008. A year from now, he will start to report directly to chief executive Steve Ballmer.
Today we announce Bill’s transition in two years, but really we also announce the transition we are making as a company, to get to the next level of success and meet the new and expanding sets of needs of a world hungry for new technology, Ballmer said at a press conference.
It’s the beginning of the end of an era.
Bill Gates, the world’s richest man, has for decades been synonymous with Microsoft. He’s probably the only top IT executive who is also a household name, a fact he acknowledged several times during the press conference yesterday.
Ozzie has been outspoken on Microsoft’s need to embrace new business and software models, but the move could be seen as having as much to do with Gates leaving as Ozzie arriving.
For a company that has software development as the cornerstone of its business, having a developer figurehead redolent of the client-server revolution may not be as useful in the software as a service era, when attracting and retaining talent is critical.
The world has had a tendency to focus a disproportionate amount of attention on me, Gates said, during a press conference that put a strong emphasis on agility and innovation. In reality, Microsoft has always had an unbelievably strong depth and breadth of technical talent.
Ozzie, who did not appear publicly yesterday, arrived at Microsoft a little over a year ago, when the company bought Groove Networks. He was quickly promoted to CTO, and in November sent a memo to Microsoft’s staff, in which he expounded a software as a service vision.
In that memo, to which Gates prefixed his own words, Ozzie talked about how Google, Skype and Research in Motion were eating Microsoft’s lunch in search, communications and mobility, and how Microsoft needed to become more agile to survive.
It’s clear that if we fail to do so, our business as we know it is at risk. We must respond quickly and decisively, he wrote at the time.
Ballmer echoed this yesterday, saying: If we do those three things: we keep a long-term perspective on the horizon, we do software as a service and our Live initiative right, and participate not only in the PC but also in other devices, it’s going to be an exciting and successful future.
The Ozzie memo can be seen now as prescient of the company’s announcement in May that it would spend about $2bn more on R&D than analysts had been expecting, and that the majority of that would be invested in Windows Live and software as a service initiatives.
These areas are seen as critical to Microsoft. Not only can the company not afford to lose in-house talent to the likes of Google, it also cannot afford to see all the third-party developer talent start to build next-generation software services on top of rival web-based platforms.
Our Live initiative is a very, very important to us. It’s a transformative thing, going from software to software and service, Ballmer said yesterday.
Gates said: Steve has driven us to make bold bets, things like Xbox, real-time communications, business applications, IPTV, and many others, including the Live platform. He is changing the company in ways it needs to be changed. He is bringing in new leadership at all levels and he is focused on the long term, how to make Microsoft a great company not just today but for decades to come.
As well as handing the chief software architect role to Ozzie, Microsoft is giving his fellow CTO Craig Mundie the new role of chief research and strategy officer, where he will work on overseeing earlier-stage innovation and intellectual property.
While Gates plans to stick around for some time, to ensure a smooth transition of the job he has essentially held for his entire career, expect to see lots of speculation over the coming two years about how much he is really driving the company’s software strategy.
He said he plans to take a seven-week vacation this summer, longer than his usual two-week break. Part of that will be a busman’s holiday in Africa. Ballmer noted that the vacation was planned before the job transition had been decided.
Gates said he will devote more time to his foundation, but that he had no intention of voluntarily relinquishing his role as chairman, were he serves at the pleasure of the board of directors.
I don’t see a time in the foreseeable future when I won’t be the chairman of the company, he said. I want to have that association for my entire life.
Come July 2008, Gates said he will concentrate his efforts on philanthropy. His Bill & Melinda Gates Foundation has concentrated mainly on health and education initiatives since it was founded.
With the success of Microsoft, I’ve also been given the gift of great wealth, he said. I believe that with great wealth comes great responsibility, a responsibility to give back to society and a responsibility to see that those resources are put to work in the best possible way to help those most in need.
