What’s Bill Gates up to? The Great Man has announced that he is planning to leave Microsoft’s helm at the ripe old age of 52 – in two years’ time. Why the delay? It’s supposedly to insure a smooth transition before Gates heads off into full-time charity work. But it’s already more than two years since Gates gave up his chief executive role, handing over to Steve Ballmer. The boss remained as chairman, but his sole executive role was (and still is, for now) ‘chief software architect’.
He still describes himself as ‘fully committed and full time’ in the Microsoft set-up. But that’s hardly consistent with his role in spending a billion a year from his Foundation’s vast resources. Is he imitating Tony Blair, and hanging on to the last moment? There may be an element of that. To quote Fortune magazine, Microsoft faces ‘brutal competition’, the stock is going nowhere, and the company is ‘in crisis’. That’s hardly the time for the world’s most successful businessman to make his exit.
In fact, he’s relying on a brand-new hiring, Ray Ozzie, to ‘remake the company’. Going outside in moments of crisis is a tried and sometimes true strategy. Ozzie has a huge reputation. But that is based on his invention of Lotus Notes, and that software breakthrough dates back a long, long way. Moreover, Ozzie is 50, which by the standards of the Google founders makes him a very senior citizen indeed. That also happens to be Gates’s present age – and his years provide the strongest argument for stepping outwards and upwards to the non-executive year.
John D Rockefeller I, the great previous holder of the world’s richest title, blazed much the same trail. In his 50s, the oil tycoon abdicated from all his positions of power in the Standard Oil empire, and concentrated instead on world-class philanthropy (which, like Gates’s, had a heavily medical bent). The Rockefeller interests were not in crisis, however: his monopoly was airtight. He could leave his associates to mind his millions and billions in total confidence. The implication is, however, that Gates wants to see if Ballmer, Ozzie and Co really can ‘transition’ Microsoft from a packaged software giant to a net-based octopus, leading the industry in every sector.
That all-sectors lead was IBM’s ambition not so long ago. It failed, because young and heretical rivals (ironically led by Microsoft) were breaking new ground on all sides – and their giant rival simply couldn’t compete effectively on all fronts. Google alone has opened up an enormous lead that is at least as important as Microsoft’s great breakthrough with Windows. Only if Ozzie succeeds in turning his new employer upside down can Gates ‘transition’ himself into a benign presence, happily collecting his dividends.
The big question is obvious: is Gates still running Microsoft or isn’t he? If he is, how long can that continue without major tensions and problems arising? Of course, the real burden of the business has rested with other people down the line, like those who have been fighting the hard and painful fight to de-bug Vista, the new operating system that is supposed to be released by the end of the year. But there’s been no muddle or uncertainty over that basic management question, WHICH? – Who’s In Charge Here? Gates has never left the answer in doubt.
There was an astonishing demonstration once when Microsoft was divided on whether to exploit the internet explosion by making Windows an open system and abandoning its proprietary hammerlock. Huge amounts of highly intelligent and highly paid labour were invested in this strategy, but at the conference called to decide the issue, Gates came in, cut the discussion short, and said in effect, ‘Microsoft is Windows and that’s that’. The pronouncement shattered several top executives, and there were many departures.
What we’re now seeing is a replay – only now Gates has lost the argument. The issue is whether Microsoft can win the most complex and testing competitive wars that any industry has ever seen. The truth is that Microsoft is now a giant beset by all the problems which drag down performance and prestige in the goliath world. The changes in technology since Gates turned 40 have been multifarious and far-reaching. Most of them, like that sensational rise of Google, have lessened Microsoft’s dominance. If Gates’s dominance doesn’t follow suit, his successors face a doubly problematic future.
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