Bill Gates: A lame duck industrialist?
The last day at work for Microsoft chairman Bill Gates is just days away, and reports have emerged of long-running rifts with senior executives.
Ten years ago, the thought of Microsoft without Bill Gates seemed almost impossible to comprehend - the two were so heavily intertwined as to make them impossible to separate.
However, time has an uncanny way of changing things and in the last three years the Seattle-based software company has done a remarkable job of untangling itself from its co-founder and chairman in preparation for his departure from day-to-day business operations.
Steve Ballmer has solidified his position as chief executive. Running day-to-day operations, he has kept things steady despite a barrage of anti-trust investigations and fines hitting the company. The arrival of Ray Ozzie following the acquisition of Groove Networks was low-key, but is perhaps the most important appointment of recent years.
Having taken on the role of chief software architect from Gates, the highly-regarded Ozzie will be the man ultimately responsible for the company's product roadmap, with Ballmer focused on selling it to the world.
Other key appointments in the last three years include Craig Mundie to the role of chief research and strategy officer, along with Kevin Johnson who took over the role of president of the platforms and services division, and who oversaw the acquisition of online advertising business aQuantive last year. These appointments illustrate how responsibility for developing products and moving Microsoft into new business areas is being delegated to Ballmer's management team, removing the need for Gates to have day-to-day involvement in strategy and product decisions.
An article published yesterday in the Wall Street Journal has suggested that the business relationship between Gates and Ballmer is strained, or at least was in the early days following Ballmer's appointment to the position. The article described the situation as one of Ballmer getting the title of chief executive, but Gates retaining the power and authority within the company.
This rift allegedly triggered a year-long struggle between the two men that until now has remained largely under wraps. The Journal article claimed the conflict between the two men paralysed business-strategy decisions for over a year and that the company still wrestles with it today.
With that in mind, it is little wonder that Ballmer has restructured the senior management team at the company to ensure that roles and negotiations previously carried out by Gates could be placed with other people, aiding the transition and his eventual departure.
Once Gates leaves on 27 June, "I'm not going to need him for anything. That's the principle," Ballmer said in the Journal article. "Use him, yes, need him, no." The comment is not malicious, Ballmer and Gates continue to be very close. It simply illustrates the business need for Microsoft to reduce and remove its need for Gates on its own terms, rather than risk having the decision made by other factors such as an unexpected death or illness.
The loss of Gates while he remained a major part of the day-to-day running of the business would likely have had catastrophic implications for Microsoft's share price, value of stock options and and staff morale.
Microsoft is not the only company to have managed such a transition in the technology sector. Sun Microsystems has seen the chief executive role move successfully from co-founder Scott McNealy to Jonathan Schwartz, while Google's co-founder Larry Page successfully handed over the chief executive's post to Eric Schmidt prior to the company's floatation.
Of course, there are several that have not gone so well. Dell struggled following the departure of Michael Dell, and only since he returned to the role of chief executive have the company's fortunes recovered. Similar moves at Yahoo, where co-founder Jerry Yang has been called back into service as chief executive to restructure the company and stave off the advances of Microsoft.
Then there is Apple, a company that almost imploded after Steve Jobs was ousted from his role as chairman. Following his return to the company as chief executive in 1997, the company underwent a massive restructuring overseen by Jobs and is now more successful and profitable than it ever was during his absence.
For Microsoft, the process is almost complete. Gates delivered a low-key, almost ceremonial presentation to developers earlier this week, with his remaining public appearances between now and his last day largely PR-driven, his remaining time as chairman similar to that of a US president in the final days before the end of a second term. He's still in the job but unable to do anything of substance.
Ten years ago, thoughts of Microsoft immediately brought about a connection with Bill Gates and his accomplishments. Ten years from now, memories of the Gates era at Microsoft will likely be almost as low-key as the contribution of co-founder Paul Allan to Microsoft's early years.
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