Is Microsoft Better Without Bill Gates?

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The conventional wisdom is that Microsoft founder Bill Gates is a nerdy software visionary who is even more brilliant as a business man. It’s hard to argue with Microsoft’s long-term success. It’s also hard to criticize the world’s greatest philanthropist, a man who has been devoting much of his time and fortune to improving and saving the lives of millions of people.

Another point of conventional wisdom in the industry is that great companies are made great by visionary founders. The reason is that a failure-inducing design-by-committee approach takes over the decision-making process at technology companies unless there’s a powerful visionary founder like Larry Elison or Steve Jobs to over-rule the group-think on key decisions.

But I believe the powerful visionary founder phenomenon can work in both directions. Sometimes a visionary founder has the wrong vision, and can over-rule good decisions again and again. Think Jerry Yang, formerly of Yahoo.

So is Bill Gates a good visionary founder like Steve Jobs, or a bad one like Jerry Yang? Now that Gates is no longer involved in key executive decisions at Microsoft, I’m increasingly thinking Gates is the latter type.

When Steve Jobs left Apple in 1985, the company clearly lost its way and started a long decline. The company started doing better upon Jobs’ return in 1996, and much better after he truly re-took control a few years later. In the past few years, the company has been dominating the industry from a mind-share point of view, dominating new markets like music players and cell phones, and even gaining real market share in the PC market.

It’s reasonable to attribute this turn-around primarily to Steve Jobs personally. If so, it’s also reasonable to attribute a similar turn-around at Microsoft to the departure of Bill Gates — if in fact such a turnaround is taking place in his absence.

Here’s what Microsoft did wrong when Bill Gates was in charge before his departure on June 27 of last year:

• Failed to capitalize on the Internet, and compete effectively with the likes of Google

• Failed to answer Apple’s devastating “I’m a Mac, I’m a PC” ad campaign

• The Mojave Experimentfiasco

• Windows Vista launch disaster

• The UltraMobile PC failure

• Lost major PC market share to Apple

• Consistently gouged OEMs on Windows, remained tone-deaf on pricing generally

• Allowed Linux to be early leader in netbooks

Here’s what Microsoft has done right since Bill Gates stopped running the company:

• Responded effectively to user demands to extend the life of Windows XP

• Fully embraced netbooks

• Launched an effective ad campaign against Apple — finally

• Made a lot of good decisions about Windows 7

• Optimized Windows 7 to work on slower microprocessorsand smaller hard drives – the first time ever

• Stopped Apple’s PC market share growth

• Reportedly dropped price of Windows in some cases from $70 to $15, according to BusinessWeek.

• Nearly killed Linuxon netbooks

Of course, it’s impossible to fully account for which successes and failures are the direct result a CEO’s leadership and decision-making. These things are influenced by a huge number of variables, from market conditions to the actions of other companies.

However, since the late 1990s it has seemed that Microsoft has consistently failed to capitalize on the biggest opportunities, and has consistently failed to respond effectively to the biggest challenged the company faced.

Since Gates left last summer, the company seems to be doing everything right.

Could it be that Bill Gates was holding the company back? I think the answer is yes.