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The world was in a for a shock when Bill Gates, co-founder and chairman of Microsoft, announced in 2006 that he would step down from the helm of affairs at the world's largest software company on June 27, 2008, to focus full time on philanthropy.
How will the company be affected by this decision? How good was Gates at handling Microsoft affairs? To get answers to these and many more intriguing queries, rediff.com interviewed some people associated with the IT industry. People like Stephen Hamm, senior writer, BusinessWeek and author of Bangalore Tiger.
A graduate of Carnegie Mellon University, Hamm first joined BusinessWeek at its Silicon Valley bureau and then moved as associate editor to New York. Prior to BusinessWeek, Hamm was an editor and writer for PC Week, The San Jose Mercury News, The New Haven Register, and other publications.
In an e-mail interview with Senior Associate Editor Indrani Roy Mitra, Hamm shared his thoughts on Bill Gates and Microsft. Excerpts:
Bill Gates steps down as Microsoft executive chairman on June 27 to pursue philanthropy full time. An era is coming to an end. Please share with us your thoughts on this.
This is a big change for (Bill) Gates.
For the first time since he was 20, he won't be a full-time employee of Microsoft. He'll be concentrating on philanthropy rather than the next big thing in information technology. This is something he has been planning and preparing for for years.
The world can hope that he has as powerful a transforming effect on philanthropy as he has had on computing.
Gates has anchored Micosoft during its turbulent times like a true master. What do you think has been his strength?
Actually, during the company's most turbulent time, when it was being prosecuted by the US government for anti-trust violations, he didn't handle it very well.
He performed very poorly when he was interviewed by the Justice Department. Microsoft's image was tarnished. The experience clearly shook him up -- so much so that he asked his close friend Steve Ballmer to sit on the hot seat, first as the president and then as the CEO.
That said, I think he has two very important strengths. The first is curiosity. He is truly fascinated with advances in science related to computing. He studies them. And he has a good eye for seeing how those advances can be integrated together in powerful ways in a combination of software and hardware.
The second strength is his ability to see how to position his company to play a central role in personal computing. He spotted the opportunity for Microsoft to supply and control the operating system for IBM's original PC.
He recognised the strength of creating an ecosystem around DOS and, later, Windows, rather than keeping a closed system, like Apple did.
He recognised the importance of producing a suite of productivity software where the applications were integrated and sold as a package.
Do you think Microsoft will be able to retain its position in the post-Bill Gates period?
Microsoft's dual monopolies of Windows and Office will gradually lose momentum and profitability over a number of years, but, for various reasons, they're quite durable franchises.
The company will also remain strong in the enterprise server market, in spite of the gains of Linux. But I don't see it gaining similar dominant positions in any of the new markets that have emerged or are yet to emerge. That's because it's not a very creative organisation.
Is Steve Ballmer, according to you, the fittest person to carry on the Gates legacy?
Yes, for now. But, eventually, I think the company needs bold new leadership and ideas if it is to successfully remake and revitalise itself.
Steve (Ballmer) is a forceful executor of strategies and motivational leader, but he has not shown the ability to create major opportunities for the company.
What is your opinion about Gates the philanthropist?
He's a serious student and analyst of complex situations, so I think he will quickly learn what is wrong with philanthropy and come up with more efficient and effective ways to deploy money for social change.
I hope that he will be even more influential as a philanthropist than he has been as a captain of industry.
Has there been any point in Microsoft history when you felt Gates the great had erred? If so, when and why?
I think the company gave up the moral high ground when it decided to defend its PC software monopolies by competing unfairly with Netscape in Internet software.
While Microsoft had always been a tough customer, this went over the top. If the company has put more effort into innovating rather than in stifling the competition in the mid-to-late 1990s, it might have been in a far more vital company today.
What, according to you, have been the reasons for Microsoft's success in the IT world?
A combination of luck, brains, and a strong work ethic. In 1981, when IBM was rushing its first PC into production, it took the unusual step of seeking components from other suppliers -- so it could get to market faster.
Gates saw the opportunity for Microsoft to supply the key element, the operating system, and he took it.
Later, working with Intel and Compaq, the three PC leaders figured out how to take control of the PC industry away from IBM, by creating the PC clone industry.
From the early 1980s until the mid-1990s, Microsoft made few major errors. Its leaders anticipated the next important steps for the PC industry, positioned themselves to play a dominant role, leveraged first their operating system position and then their productivity suite position to achieve their goals, and worked at it until they got what they wanted.
What do you feel Microsoft should do to retain its position as the global IT major?
The future strength of the company could come from its labs. I think Ballmer should challenge the researchers to invent the future and then come up with effective ways to bring the fruits of research quickly to market.
Also, the company should build its future on the basis of collaboration with the rest of the industry, rather than trying to manipulate things so it leverages its monopolies to gain proprietary advantages.
Open technology is best for customers, ultimately (the current successes of Apple notwithstanding). Over the long haul, companies that do what is best for their customers will win.