Microsoft to lose Gates' star power

Bill Gates' scheduled departure from Microsoft in July 2008 may not have a dramatic technical effect on software development, but the company will miss the benefits of his star power in the industry, according to observers.

In addition, Gates' announcement last week that he was going to transition out of Microsoft throws the spotlight on CEO Steve Ballmer's tenure with the company. The two have spent about the same number of years at Microsoft and are close in age. They are the No. 1 and No. 2 stockholders in the company.

"This is really going to be the end of an era in many ways," says Dwight Davis, an analyst for Summit Strategies. "I don't think Microsoft will suffer dramatically from Gates' departure in a technical sense, but from a profile sense, from an industry image sense, Microsoft is not going to be perceived to be the same without him at the helm. Only a handful of companies have had a real strong personality who was very synonymous with the company itself, and Bill Gates was on top of the heap in that regard."

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Bill Gates' scheduled departure from Microsoft in July 2008 may not have a dramatic technical effect on software development, but the company will miss the benefits of his star power in the industry, according to observers.

In addition, Gates' announcement last week that he was going to transition out of Microsoft throws the spotlight on CEO Steve Ballmer's tenure with the company. The two have spent about the same number of years at Microsoft and are close in age. They are the No. 1 and No. 2 stockholders in the company.

"This is really going to be the end of an era in many ways," says Dwight Davis, an analyst for Summit Strategies. "I don't think Microsoft will suffer dramatically from Gates' departure in a technical sense, but from a profile sense, from an industry image sense, Microsoft is not going to be perceived to be the same without him at the helm. Only a handful of companies have had a real strong personality who was very synonymous with the company itself, and Bill Gates was on top of the heap in that regard."

Over the years, Gates has been spending more time on work with the Bill & Melinda Gates Foundation. Last year, Gates, his wife Melinda and rock star Bono were named persons of the year by Time magazine.

"I believe with great wealth comes great responsibility," Gates said in a press conference last week where he announced the transition. "Responsibility to see those resources put to work to help those most in need." As of last year, Gates and his wife had endowed the Gates Foundation with more than $28.8 billion to support philanthropic initiatives in the areas of global health and learning.

The debate over how long Gates might remain at Microsoft has been going on for years.

"It doesn't come as a big shock to me," says Jackson Shaw, a former Microsoft manager and now senior director of product management for Active Directory and integration solutions at Quest Software. "We all have been waiting for when Bill is going to spend more time working on his charity and foundation and stuff that is really good for the world. But the concern in my mind as he moves away is who fills the void, because Bill is a special guy."

The watch to see if anyone can succeed in filling the void won't officially start until 2008.

But Ray Ozzie, Microsoft CTO, will immediately assume the title of chief software architect and will work side by side with Gates over the next two years.

"I've worked with Ray for over 20 years and his vision has led to some of the most important developments in our industry," Gates said.

Ozzie came to Microsoft last year when the company acquired Groove Networks.

Craig Mundie, another CTO for the company, will immediately take the title of chief research and strategy officer and work with Gates to take over his responsibility for Microsoft's research and incubation efforts. Mundie also will partner with general counsel Brad Smith to guide Microsoft's intellectual property and technology policy efforts.

Gates said Microsoft would continue to thrive, mostly based on the talent and commitment at the company.