Analysis: Look for change at Microsoft after Gates

With today's announcement that Microsoft Corp. Chairman and Chief Software Architect Bill Gates plans to move away from his day-to-day duties by July 2008, analysts said change is in the air for the company.

That's because Gates has for so long played such a major role at the company he founded in 1975 that any transformation in his role is bound to have an effect, said Rob Enderle, principal analyst at Enderle Group in San Jose.

"Microsoft is so much Bill Gates in terms of corporate personality," Enderle said. "You will see that starting to change [because] he represented such a big footprint. …You can't help but see some level of change. I don't think there is anyone who can replace Gates. He is larger than life."

Microsoft announced that Chief Technical Officer Ray Ozzie will immediately assume the title of chief software architect and start working with Gates on all technical architecture and product-oversight responsibilities.

Enderle noted that Ozzie was hired with the intent that he eventually would step into Gates' role as chief architect. Gates likely judged that Ozzie had performed to his satisfaction and "it was a matter of pulling the trigger and letting it happen," he said.

Enderle also pointed to recent concerns about delays for Microsoft's upcoming Windows Vista operating system, which may have prompted Gates to "think it was time to make the transition."

The Vista delays "reflected as much on the chief architect as it did the division president," Enderle said. "Bill was a bit more distracted from the chief architect role than he should have been."

In addition to Ozzie, Craig Mundie, Microsoft's chief technical officer for advanced strategies and policy, will also take on new duties during the transition. He gets the new title of chief research and strategy officer and will work with Gates to assume responsibility for the company's research efforts. Mundie also will be working with general counsel Brad Smith on Microsoft's intellectual property and technology policy efforts.

Dwight Davis, a software industry analyst at Summit Strategies Inc., said he wasn't surprised by today's announcement, since "Bill has obviously had a range of interests embodied in his activities with the Bill and Melinda Gates Foundation for a number of years."

"He obviously made a partial step to distance himself from the day-to-day" work when he moved to the chief architect’s position, Davis said. "The company has continued to do well in that current arrangement," he added.

"Microsoft is really at a point where you could argue that nobody is indispensable because of its industry position, installed base, ecosystem of partners and developers -- and what is fairly significant momentum," Davis said. "There are various challenges, internal and external, but I don’t think the departure of the founder and the guy who is most associated with the company will severely disrupt its prospects [or] its near-term success."

He noted that Microsoft had already been changing its strategy, in part, with the arrival of Ozzie.