Saturday, May 25, 2024

Microsoft After Gates: A Mixed Bag

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It’s been a year since Microsoft co-founder and chairman Bill Gates stepped away from the company full-time to focus on the Bill and Melinda Gates Foundation. Gates, however, retained his role as chairman of Microsoft’s (NASDAQ: MSFT) board.

That left long-time CEO Steve Ballmerto make the myriad of decisions it takes to run the world’s largest software company on his own.

“In the end, when the buck stops, it stops at Steve now … he’s the one responsible for whether Microsoft fails or succeeds,” Tim Bajarin, president and principal analyst at Creative Strategies, who has followed Microsoft (NASDAQ: MSFT) since it was still a tiny company, told

Additionally, some would argue that Gatesactually left Microsoft in spirit some years earlier as he began the transformation needed for the company to run smoothly after his retirement. For instance, Ballmer, a former Harvard buddy of Gates who has been with the company since 1980, took over as CEO from Gates in 2000. (Gates co-founded Microsoft with now-billionaire Paul Allen in 1975.)

“The changeover actually started long before Bill started phasing himself out,” Rob Enderle, principal analyst at the Enderle Group, and another long-time Microsoft watcher, told

A monster to do list

There has been plenty for Ballmer to worry about over the past year. That includes delivering Windows 7 on the heels of the less than stellar rollout of Windows Vista, pushing forward with key initiatives such as the Bing search engine, Windows Live Services, and cloud computing, and handling tussles with the European Commission (EC). And of course, there’s also the bottom line to consider.

The report card is spotty. Windows 7 is on track to ship in October, earlier than originally promised. Microsoft’s recently launched Bing search engine also looks like it may help the company finally break out of a weak third-place position behind Google and Yahoo.

However, Microsoft’s cloud computing initiative is still in the early phases, while its Live Services haven’t quite caught the public imagination yet.

Meanwhile, the software giant’s sales and earnings have been hit hard by the economy, although it is still profitable. Microsoft is also currently steeling itself for what’s likely to be a major ruling against it by the EC over bundling Internet Explorer with Windows going back to 1996.

“You have to at least give Steve Ballmer a B or B+ for execution,” Bajarin said.

But any changes brought on at Microsoft by Gates’ departure are subtle and hard to detect because of the long-term collaboration between the two. “The EC problems were Steve’s [responsibility], but their roots were when Bill was still running the company,” Enderle added.


One very noticeable thing about Gates’ departure: It has taken multiple people to fill Gates’ shoes. For the history of the company up until last year, Gates was the public face of Microsoft.

“The ‘face of Microsoft’ is now multiple faces,” Rob Horwitz, research chair and co-founder of Directions on Microsoft, which exclusively covers the company, told

Among those are Ballmer as well as Chief Software Architect Ray Ozzie, and Chief Research and Strategy Officer Craig Mundie. However, other Microsoft senior executives also now speak more frequently for their areas of responsibility.

For example, if the topic is unified communications, executives like Stephen Elop, president of Microsoft’s Business Division, are likely to be featured speakers, Horwitz said.

“I think the transition has been done really well — much better than other companies whose founders have moved on,” he added.

Article courtesy of

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