Bill Gates in 1983
Farewell, Bill Gates. Your 25 years at Microsoft have nurtured it from obscurity into a megalith. Now, it’s something in between.
One thing is certain. Microsoft was built around the figurehead of Bill Gates. This Friday, Gates is bidding farewell, depriving Microsoft of its key symbolic element: himself. He’ll stay as a chairman, hovering in the periphery, trying to stop bad deals in the making (Yahoo, anyone?). But Gates-free Microsoft just won’t wield the might it used to.
According to an article in today’s India Times,
Gates’s bespectacled nerdish visage is an integral part of Microsoft’s image and his departure is symbolic, according to analysts. “The challenge Microsoft has when the founder departs is remembering its heart,” said analyst Rob Enderle of the Enderle Group in Silicon Valley. “At some point the firm has to take the essence of what made Bill Gates successful and make sure that is preserved. Whether it is a company or a person, once you’ve lost your heart there isn’t much left but a shell.”
After founding Microsoft in 1975, Gates claims to have put in steady ten-hour days at work. Now he’ll focus his workaholism on the Bill and Melinda Gates Foundation, which assists developing nations with health and education concerns. The foundations boasted about $44.7 million net assets in 2007.
Meanwhile, Microsoft continues to flounder. Desktop software, formerly the company’s key strength, has become a weakness. The Vista operating system is a flop with customers (for good reason, I might add). Macs, meanwhile, now comprise more than 5% of the world’s computers. Google’s free online programs make MS Office less essential than it used to be. Most recently, Microsoft failed in its recent bid to take over Yahoo.
“Microsoft has to leverage its strengths; right now it is thrashing a bit,” Enderle said. “The company is on its own. The training wheels are off. It needs a way to point itself in the right direction and peddle like hell. You could see Microsoft struggling after Bill Gates stepped out of day-to-day roles.”
“A founder takes such a larger-than-life role and directs a company in very subtle ways that are often forgotten when a founder leaves. That gap, for a lot of companies, has been almost terminal.”
What’s next for the company? Its strengths remain relegated to servers and tools. (The Xbox hasn’t yet made a profit.) Back in March, Time Magazine interview with Gates indicated that he was optimistic, but his ideas all sounded familiar.
The real question remains: what will Microsoft without Gates look like?
Will it ever be scary again?
Check it out: 10 Investing Books Recommended By Warren Buffett.
Drea,
Microsoft hasn’t been scary for a while. Gates had the entire PC marketplace figured out back in 1989, but seems to have gotten stuck in that “own the platform” mindset and Microsoft hasn’t been the same since.
Mike
Saudi Arabia has already boosted its production by 300,000 barrels a day, or about 3 percent, to 9.45 million barrels a day last month. But that has had little impact on soaring prices. Oil futures in New York have gained more than 40 percent this year. They rose 2 percent to $134.62 a barrel before the meeting on Friday.
very interesting: Will the market implode or rally??
http://www.wallstreetjournal.com/story/market_implode_or_rally?
Correction - The foundation boasts $44.7 Billion in assets
Drea: The problem isn’t limited to Microsoft. Any company that has an iconic founder/leader - Apple, Berkshire Hathaway, Virgin - is going to have a difficult time replacing the leader. Remember when Steve Jobs was kicked out of Apple in the 90s? Steve Ballmer is no Bill Gates, and I fear that that won’t be good for Microsoft.
Additional correction. If the picture caption is correct, then Gates has been with Microsoft atleast 25 Years.. (or he’s gone already..)
Mike–Good point. I would argue that others perceived M$ as scary well into the early 2000s, whether it was objectively scary or not. For example, I remember Google’s Eric Schmidt making several references to wanting to take MS down around 2003.
William–Good catch. I think he was official CEO for 22 years…but definitely with MS before that.
Ray–I couldn’t find any information stating that the foundation currently has that amount in assets. Thus, I used the numbers listed at the end of 2007.
Greg–I wonder what they’re going to do? A new, charismatic exec might not be a bad idea…
Maybe a breath of fresh air is what Microsoft will need. It will be interesting to see what happens with the stock in the days surrounding.
Evolving some Windows O/S flavors that have an improved security architecture is clearly in eveyones long-term best interests. Discontinuing availability of a mainstream workhorse flavor like Windows XP is a huge disservice to the computing community. Just when many SMB’s are starting to experiment with server & desktop virtualization, forcing everyone to try to get their legacy apps to run on Vista & Server 2008 is annoyingly opportunistic. Making analysts quarterly forecasts by coercive marketing tactics is, in the long run, going to cause many CIO’s to explore open source options that they might have preferred not to even consider awhile ago. Bad will, like good will, is cumulative…