WASHINGTON (AFP) – Microsoft is mapping plans for a future without Bill Gates as the world’s biggest software giant gears for battle with Google and others to be the dominant high-technology company.
Gates, who built one of the largest personal fortunes in modern history through Microsoft, announced Thursday he would give up the daily running of Microsoft by mid-2008 to concentrate on his foundation’s work on global health and education issues.
Gates will retain the title of chairman of the group he founded over 30 years ago, while handing over his title of “chief software architect” to Ray Ozzie, another software industry pioneer.
Ozzie, 50, named “person of the year” in 1995 by PC Magazine for creating Lotus Notes software, enabling a trend of people working together in groups on computing, will assume a key role at Microsoft as the company faces a potential shift of the computer industry landscape.
“Bill Gates has always dominated the company’s technical landscape. But Ray Ozzie’s record in the IT industry demands unquestioning respect,” said Richard Edwards, senior research analyst at the Butler Group.
“As the father of Lotus Notes, and member of the team that brought one of the first spreadsheet programs to the PC, he will have no problem filling Gates’s shoes from a technical perspective.
“But his vision is to add a Web dimension to, or ‘webify’, everything Microsoft does, from the Xbox360 games console to the software products running on millions of PCs,” Edwards said.
That vision “will require nerves of steel and unwavering commitment from the Microsoft faithful if this plan is to have any chance of succeeding.”
Edwards argued that “the number-one task for Microsoft’s ‘new broom’ will be to neutralize the threat from Google, and to then regain control of the desktop and consumer market.”
Gates “epitomizes the desktop software model. So there is something timely about his transition when the Web is poised to potentially change desktop software’s relevance,” added Joe Wilcox, an analyst at Jupiter Research.
“For Ray and other Microsoft executives, the challenge will be either reinventing the company for the Web or binding more of the Web’s utility to desktop software. Either task is going to require a cultural change, among the Microsoft leadership and the older vanguard.”
The company, which has become one of the world’s largest and controls more than 90 percent of the market for desktop operating software with its Windows system, faces additional challenges in the transition, say analysts.
“The move ends an era at Microsoft,” said Kimberly DuBord, analyst at Briefing.com.
“Gates, a technological visionary and the face of Microsoft for decades, leaves (chief executive) Steve Ballmer vying for control … No doubt this will create a power struggle in the lower rankings over the next two years, which could be a major distraction for the company.”
DuBord added that “no one person can replace Bill Gates, which leaves an intellectual void at the company.”
As part of the reorganization, another Microsoft chief technical officer, Craig Mundie, will take the new title of chief research and strategy officer.
Robert Breza, analyst at RBC Dain Rauscher, said there is the possibility of a re-energizing of the high-tech industry as a new generation of leaders takes over.
“There is a changing of the guard going on within technology with a transition from founders to professional managers: Larry Ellison at Oracle has ceded to his two presidents; Michael Dell has handed the reigns over to Kevin Rollins; Scott McNealy has left Sun (Microsystems); and now Gates’s transition at Microsoft,” Breza said.
Analyst Brent Thill at Citigroup agreed, saying that Gates’s departure could dent morale in the near term but that the leadership transition “will give a new generation of leaders a chance to step out of Bill’s shadow, evolve new business models and develop the software and services vision of Windows Live.”