As Gates walks away, Microsoft faces challenges

June 23rd, 2008 - 9:08 pm ICT by IANS  

New York, June 23 (IANS) As Bill Gates prepares to walk away later this week from Microsoft to focus on his $37-billion charitable foundation, the company he founded will face some challenges getting along without him, Newsweek magazine said in its latest issue. The most public of those challenges is overhauling the software giant’s Internet strategy; Microsoft is doing so miserably in competing with Google in the search and advertising business that it unsuccessfully attempted to buy Yahoo!, only to send it into the arms of the rival.

“How did things come to such a pass considering Gates, 52, had himself foreseen the coming Internet tidal wave in a 1995 memo?” Newsweek asked.

Gates defended the company: “How have things gone since 1995? Have our sales increased? Have our profits increased? (Answer: yes, about tenfold.)”

But then he confessed, “Do we also wish we’d done everything that Google has done? Sure. But I’ll take our track record since 1995 versus anyone.”

So, who after Gates will make the company competitive in the Internet space, as well as handle challenges including the anti-trust probes in Europe and getting out the new version of Windows without the bugs noticed in Vista?

Steve Ballmer, who took over as chief executive from Gates in 2000 after 20 years as his key aide, is confident Microsoft can compete as effectively without its founder.

Yet, Ballmer confessed, “Bill grew up with every one of the technologies in this company. He’s got more capacity to remember things than anybody I’ve ever known. It’s unlikely we’ll have anybody again who has that breadth.”

While Ballmer runs the business, Newsweek reports, “the burden of filling the Gates gap in geek expertise falls to a pair of technical leaders who will split duties.”

Craig Mundie, a 16-year Microsoft veteran, will lead longer-term projects involving education, healthcare and software that exploits the super-powerful computers of the future. He’ll also concentrate on more basic technologies like chips and infrastructure.

Ray Ozzie, the software pioneer who invented Lotus Notes and arrived in 2005 when Microsoft bought his company, Groove, will be crafting the Web-based strategy that will become effective in the next couple of years.

Ozzie, who has inherited Gates’ title as chief software architect, told Newsweek that Gates was responsible for stoking the fires of urgency at Microsoft.

“A lot of the company’s strength is that Bill created a culture of crisis - if there weren’t a Google, we’d have to make one. This is a period of unprecedented strength for the company. If there had to be a time when Bill transitioned out, we couldn’t have set it up better than it is right now,” Ozzie said.

As for Vista, Microsoft is well aware of its failings and Gates wants to make sure the next release, Windows 7, will not suffer a similar fate. Steven Sinofsky heads the Windows effort but Gates will continue to follow the project closely.

Newsweek goes on to quote critics of Microsoft who contend that Gates’ departure is anti-climactic, because the company is past its prime. “The Gates era has already ended - this is the coda,” says Mitch Kapor, founder of Lotus, the spreadsheet giant humbled by Microsoft in the 1980s. “Today, Google is the defining company in the industry.”

The magazine notes that while Microsoft remains a corporate giant, taking in more than $50 billion a year, it has serious woes. Its stock has barely moved up in five years. Its core business of Windows and Office is still hugely successful, though while its US anti-trust matters are settled, the EU continues to investigate Microsoft for behaviour that supposedly exploits its 90-plus percent market share.

Though Gates will remain the chairman of the company’s board of directors and plans to spend the equivalent of one day a week on company business, an era has ended since his name and face had become synonymous with Microsoft.

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