Will Microsoft be directionless without Bill Gates?

Bill Gates will step away from the day-to-day activities at Microsoft in about a month to focus his estimable intellect and energy on his nonprofit work, the Bill & Melinda Gates Foundation. He will remain chairman of the company.

(Credit: Dan Farber)

As the figurehead, spiritual leader and most forceful personality at the company he founded in 1975, Gates will be missed in some of the daily skirmishes and debates over technology issues and how Microsoft wages its battles with Google, Apple, Oracle, the U.S. Department of Justice, and the European Union. But, Gates gave up the CEO title to Steve Ballmer in January 2000 and his chief software architect title to Ray Ozzie in June 2006.

In her new book, Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era, Mary Jo Foley wrote that "a Gates-less Microsoft is going to be a directionless Microsoft--at least for the near term. The existing set of to managers is too mired in old thinking and old ways to turn the Redmond ship quickly."

I asked Mary Jo if she thought Gates was able to inject his way of thinking about software and business within the Microsoft DNA. "I don't think anyone thinks like Gates at Microsoft. Jeff Raikes was the most like him, in the way he could look ahead for what's coming in technology and put it in a way that everybody could understand it, but he is retiring this fall," she said.

She goes on to say that without Gates leading the charge and with too many MBAs in leadership positions, Microsoft cannot be successful in the next decade of its existence:

"If Microsoft were still the company it was 10 or 20 years ago, with the simultaneously ruthless and cautious Gates at the helm, I'd have no qualms predicting that the Redmond vendor will be successful in its next decade-plus transition. But can a company that is becoming more and more MBA-heavy (not to mention employee heavy, with a workforce approaching 100,000 when/if the Yahoos are added) be guaranteed of continued success in an ever more technology-driven, nimble and Web-centric world. In a word, no.

I think that the "ruthless" and "cautious" Gates she describes (I would say "intense" and "relentless" for the graying Bill Gates) has prepared the way for a succession that won't adversely affect the company. Ballmer already knows how Gates thinks and has his ear. They have been working side-by-side for over 30 years. It wasn't only Ballmer who missed the Internet the first time around.

Gates has spent time with Ozzie and hundreds of other top managers over the years, and they must be clued into his work ethic and way of thinking. They have been to the Bill Gates school of software development, envisioning and business management. That doesn't mean they start rocking in their chairs as Gates does or they sprinkle the word "super" in their orations. Ozzie has a more genial style than Gates, but there is more than one way to communicate a software architecture vision.

No one can replace Gates--that is not the point. Microsoft is in several businesses and generates more than $50 billion in revenue and a very healthy profit. The company is fighting battles on a lot of fronts, especially with Google, which could generate nearly half the revenue Microsoft does just selling search ads. That's not something Gates has been able to fix during the last few years.

What Gates brought to Microsoft was a focus, intellect, and tenaciousness that propelled the company forward. It was a culture that thrived on having the smartest kids on the block, who had all the confidence in the world, and enjoyed vanquishing established giants like IBM. Now Microsoft is the giant and Google has many of the smartest kids on the block and supreme confidence, sometimes interpreted as arrogance.

As chairman, Gates is not going away. If a crisis arises, he will be in the middle of it. Gates could also pull a Michael Dell, who handed the reigns of his company over to Kevin Rollins, but retook the CEO job when the company's performance faltered three years later.

But the challenge for Microsoft isn't filling Gates' role in the company or that Microsoft will be directionless without Gates, but in getting the smartest kids on the block to come and build products for 16 hours a day. This is where Mary Jo gets it right. Microsoft needs to attract the best and brightest. That requires an inspired leader who the troops believe can take them to the promised land. It remains to be seen if the software+services vision led by Gates and carried on by Ozzie and his team will be innovative enough to attract the talent and technical brilliance needed for the next decade of Microsoft.

Below is an interview I did with Mary Jo about the her views on Microsoft's future:

TV Show hosted by Ustream

[Thomas, David]

Not fair, I didn't even read the article. But doesn't Microsoft seem to be without a clear direction now? They want to conquer the consumer space, yet fail to provide a consumer (or one desired by a consumer) experience. They excelled at providing a solution (whether it be their idea or not), that worked more as something you added to someone else's product. However, Zune, Vista, Plays-for-Sure, the Home Media Center, Live Search, The Surface, are all signs of desiring to be more pervasive in the consumer market place, but they continually fail to satisfy those same consumers, and lack the focus to do one thing extremely well. I think with the right person at the helm, this could change in short order. However, I'll leave the speculation about that to someone else.

[Mr. Dee]

I believe Microsoft can survive without Gates going into the future, it has been surviving without his leadership in many areas for many, many years. Take for instance Office 2007's Office Fluent UI, it was Steven Sinofsky who decided to take that risk, regardless Gates encouraged it. Gates decided to lead the Longhorn project which evolved into Vista, but I remember in an interview where he said he had nothing to do with the project in an effective way. Yes, Gates is a visionary (at times), he doesn't see the value of things until they become mainstream ie. Internet, Search. But when it comes to aggressive challenge and going at it, again and again and again Gates is a very effective/confident inspirational figure in the Company. Bill is a cult figure at the Company and its hard to compare Ozzie to his dominance in terms of respect among Microsoft's employees, technology industry and the world.

Where Ozzie definitely matches Gates is the technical aptitude and I believe its the vision Gates saw in Ozzie to lead the Company in the right direction where it concerns transforming the Company's existing shrink wrapped products and services. I believe this is the answer to carrying Microsoft forward. But the problem I have is the inspiration, the wow factor when it comes to Gates, does Ozzie have that same effect on people, nope.

Microsoft must continue on that path though it discovered of capturing the best and brightest. Programmers in all areas must continue to be held at high regards in the Company, it is what drives the Company forward in terms innovation and inspiration. Another problem is the size, Microsoft is not a cozy little software company in the Seattle area anymore. I don't know what they can do here, but I still think small teams need to have stronger say on how the products improve. I am sure Gates will continue have an impact on the Company for years to come, either directly as Chairman or indirectly while working at the foundation.

[The_Decider]

Microsoft has been stuck in one direction for many years now. That direction is whatever they are following at the moment. Microsoft has floundered under Gates and will continue to do so.

They have no clue why they are doing what they are doing. They have no clue what will be the big thing in the future. They haven't come out with a quality product in more than a handful of years.

[Mr. Dee]

@ The_Decider, I disagree. Microsoft has introduced a quality product, Office 2007 is an example of this. The Office Fluent UI is both innovative and just much easier to use from a die hard Office user to someone using the suite for first time. If you look at the Media Center and Tablet PC, those are areas Microsoft has really driven and really invested in and believed in. From the days of Pen Computing and WebTV the Company has stood by the belief they will reach the mainstream. Media Center has been a success and others such as Apple have followed in the same foot steps with Front Row. Tablet PC computing is another area Microsoft continues to challenge and the Company is showing its commitment with each release/update. These are all quality products and technologies the Company has released over the past seven years. Looking into the future I see where the Company is focusing on making computing more natural taking on new challenges with things like the Surface, Touch Wall and even in Search. There is a lot to look forward to from this Company.

[Inconnux]

Microsoft has a clear direction, its just too bad that it is in the wrong direction. I won't buy another Microsoft product again after the abomination that is called Vista. I have never hated a product more than Vista, and the sheer frustration that I have had with it has made me swear that I will never buy another of Microsofts bloated bugware.

[Mr. Dee]

@ Inconnux, it would be nice if you could provide reasoning with your frustrations. Vista in my opinion is no different in terms of compatibility when compared to past releases of Windows. In fact its even more compatible. On my generic AMD system here, its the first version of Windows I installed and saw a clean device manager. I remember when Windows 2000 Pro came out that was a nightmare compatibility wise. What really hurt Vista's perception as a good release is quite simple - it took too long to come to market. The transparency the Company gave the project made it seem too ambitious, also, they promised too much and under delivered in some areas (WinFS, Castles, PC Syncing to name a few). But overall its a good OS and includes a lot of out of box tools most consumers can really use and have a great time with on the PC. Of course the Company has realized Vista is behind them now and they need to make it more performance savvy with the next release (Windows 7), Gates has even said so in the media, it will use less memory and connect up to things like the cell phone in a rich way. The strict silence so far from the Company so far on Windows 7 in some way could suggest there is a chance Microsoft is up to something big.

[Earl Benzar]

I just read an article on another site that is discussing a Gartner presentation where Gartner is calling Vista "doomed" (the article is here http://www.beatenetworks.com/blog/index.php?/archives/261-Gartner-Windows-Vista-Doomed.html)

I would say that with Bill Gates, MS is in trouble in some areas. But without him, I worry because I don't think much of Ballmer.

[lee_chenghao]

@Mr Dee and Inconnux , Apparently to experienced users (users of previous editions of windows when it first launched) , the experience of vista was relatively hassle free compared to previous editions.

Perharps to new users (users of windows only after it has been patched eg sp1 sp2 etc), having to deal with "bloated bugware" is sheer frustration.

My feel of microsoft's direction is that of oligopolistic reaction ( by knickerbocker)
Seeing successful technology by other firms in the same industry and replicating them to limit their first mover's advantage.

An example to highlight my point would be M/S's Live mesh in response to Google's Doc

This would work if and only if they could come up with a more intriguing product that makes its usage more compelling then the copied peer.

But i dun really see that happening . If i want a cool player , i would get ipod , if i want a functional and affordable mp3 player , i would get zen stone , Zune doesn't seem to have any attraction except for M/S fans

[Kev Orng]

I must have missed an earlier article; Microsoft currently has some direction? I thought they were grasping wildly at "me-too" straws whilst trying to maintain bloated software jam-packed with legacy code.

[Mr. Dee]

Kev, you must understand that Microsoft must appease a different set of customers (who are the majority in this case) compared to Linux and Mac OS X. Legacy support is still a necessity for the millions of businesses large and small who depend on Microsoft to continue supporting their 20 year old infrastructure while they embrace new technologies and paradigms a new version of the OS offers. Vista is Microsoft's most drastic effort so far to break with the past and we can see the results of that through the many complaints of compatibility. Microsoft needs to figure out an answer to this conundrum with Windows 7, either they are going to inform users you need to shift to this new update that focuses on moving the platform forward which means no support for applications that are not fully 32 bit or still considered legacy. If they can't make that decision then an innovative approach to virtualization needs to be implemented for compatibility sake, hopefully SoftGrid can be the answer to this. But compatibility still remains one of the reasons why businesses around the world choose Windows over the competition and TCO is also important, familiarity and investment in a proven platform.