Gates to step down full-time from Microsoft in 2008

16 Jun 2006

Bill Gates has confirmed that he plans to transition out of his day-to-day leadership role at Microsoft and focus instead on philanthropic interests in health and education.

The company announced a two-year transition process to ensure that there is a smooth and orderly transfer of Gates’ daily responsibilities and said that after July 2008 Gates would continue to serve as the company’s chairman and an advisor on key development projects.

College drop-out Gates, 50, started Microsoft in 1975 with childhood friend Paul Allen. He took Microsoft public in 1986 and was the company’s chairman and CEO until 2000 when Steve Ballmer took over as CEO. For the past six years Gates has focused on Microsoft’s software development as the company’s chairman and chief software architect. In 2000, with his wife, he formed the Bill and Melinda Gates Foundation, whose assets now are $29.1bn.

Microsoft has pioneered many of the software innovations that paved the way for the digital information revolution and launched the PC industry. Beginning with MS-DOS, Microsoft’s first operating system, and continuing with products such as Microsoft Office, Microsoft Windows and Xbox, the company has developed a broad range of software, services and solutions that have transformed the way people work, communicate and play. Microsoft has 63,000 employees in more than 100 countries and generates annual sales of more than US$40bn. The company employs around 1,090 people in Ireland.

Gates says he intends to focus on his philanthropic pursuits, specifically spending more time with on his global health and education work at the Bill and Melinda Gates Foundation.

The company announced that chief technical officer Ray Ozzie will immediately assume the title of chief software architect and begin working side by side with Gates on all technical architecture and product oversight responsibilities to ensure a smooth transition.

Chief technical officer Craig Mundie will immediately take the new title of chief research and strategy officer and will work closely with Gates to assume his responsibility for the company’s research and incubation efforts; Mundie also will partner with general counsel Brad Smith to guide Microsoft’s intellectual property and technology policy efforts.

“Our business and technical leadership has never been stronger and Microsoft is well-positioned for success in the years ahead. I feel very fortunate to have such great technical leaders like Ray and Craig at the company,” Gates said. “I remain fully committed and full-time at Microsoft through June 2008 and will be working side by side with Ray and Craig to ensure that a smooth transition occurs.

“This was a hard decision for me,” Gates added. “I’m very lucky to have two passions that I feel are so important and so challenging. As I prepare for this change, I firmly believe the road ahead for Microsoft is as bright as ever.”

In September 2005, Microsoft chief executive Steve Ballmer organised the company into three divisions under presidents Jim Allchin, Kevin Johnson, Robbie Bach and Jeff Raikes, who were given much greater responsibility for product development and strategy decisions within their respective businesses. In August 2005, the company appointed Kevin Turner as chief operating officer.

“Bill and I are confident we’ve got a great team that can step up to fill his shoes and drive Microsoft innovation forward without missing a beat,” Ballmer said. “We will continue to hire the world’s best technical talent and give them the tools to do their best work and we will continue to tackle the biggest challenges and opportunities for our customers by investing for the long term.”

Ballmer and Gates noted that Microsoft has been steadily expanding its senior leadership in recent years, and that today’s announcement continues a transition process that has been under way for several years. In January 2000, Gates assumed the role of chief software architect and Ballmer assumed the role of CEO, responsible for all day-to-day operations and company business strategy.

“This is a very sensible and thorough approach. A two-year transition will ensure that the company has a smooth transfer of strategy and knowledge from Bill to the next generation of leaders,” said James Cash, member of the Microsoft board of directors and former James E Robison Professor, Harvard Business School. “Steve and his management team are very impressive and I’m confident the company will not miss a step.”

By John Kennedy